WTI oil blasts to 4-year highs - could the mid-70s be next?
Matt Weller, CFA, CMT June 27, 2018 1:27 PM
Last week, West Texas Intermediate (WTI) crude oil traded down to 63.70 intraday, the same level it was trading at in early January.
Last week, West Texas Intermediate (WTI) crude oil traded down to 63.70 intraday, the same level it was trading at in early January. Much like the US stock market, prices had traveled both higher and lower in the first six months of the year, but was trading essentially unchanged from the level seen on the first trading day of the year.
To put it mildly, the situation has changed dramatically over the last week and a half. Spurred on by US threats to cut off Iran’s oil exports and this morning’s surprising 9.9 million barrel drawdown in inventories (the biggest drop of the year so far), WTI has surged to test 73.00 as of writing.
From a technical perspective, WTI has rallied by nearly 15%% from last Monday’s intraday low, forming three large bullish marubozu candles along the way. These large bullish candles indicate strong buying pressure throughout the day and tend to foreshadow more gains in the coming days, keeping the outlook bright for oil longs.
In addition, “black gold” is peeking above its May high near 72.90 to hit its highest level since November 2014. As of writing, WTI is trading directly at this level, but a confirmed close above would open the door for continued strength toward previous-support-turned-resistance at the 2011 and 2012 lows in the 76.00-77.00 zone, with a break above that barrier opening the door to the psychologically significant 80.00 level.
Even if rates fail to break 72.90 resistance today, any pullbacks will likely be short-lived as long as WTI hold above last week’s lows, and bullish trend line support, in the mid-60.00s.
Source: TradingView, FOREX.com
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.