In last week’s post on oil, I suggested that WTI was heading towards $85 a barrel, which drew some interesting comments considering it was trading at $69.48 at the time. However, as expected, it was another positive trading week for black gold, which closed firmly higher on excellent volume (and rising on the previous week). The commodity has opened at $71.39 and is looking to push higher as we reach an extreme on the daily chart, with a low volume node now directly ahead. This bodes well for a continuation through to $72 per barrel and beyond. From a fundamental perspective, it has been interesting to note that we have seen a draw in oil inventories over the last three weeks. This, coupled with the driving season, has all combined to help provide a further injection of positive momentum and helping to fuel oil through the $70-per-barrel area.
Moving to the weekly chart, the next technical level of significance is clear to see, and it is at $75 per barrel, a level that was tested repeatedly in 2019 and held on each occasion.
So in summary, expect to see the WTI price rise until it hits this level at which point we can expect to see some congestion build. Then, it will be down to the buying volume coupled with the fundamentals to provide a platform and drive the price on towards the top of the chart longer term.