Crude Oil Price Update – Strong Upside Momentum but Bulls Facing Wall of Resistance from $74.77 to $76.98
U.S. West Texas Intermediate crude oil futures are trading higher for a fifth straight session on Monday amid supply concerns as demand picks up in parts of the world with the easing of pandemic restrictions.
The market is also getting a lift from bullish comments from Goldman Sachs, which raised by $10 its forecast for Brent to $90 per barrel. This puts WTI at about $86 per barrel. The catalyst behind their revised outlook is faster fuel demand recovery from the outbreak of the Delta variant of the coronavirus and Hurricane Ida’s hit to U.S. production led to tight global supplies.
At 10:28 GMT, December WTI crude oil futures are trading $74.69, up $1.08 or +1.47%.
“While we have long held a bullish oil view, the current global supply-demand deficit is larger than we expected, with the recovery in global demand from the Delta impact even faster than our above-consensus forecast and with global supply remaining short of our below consensus forecasts,” Goldman said.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. The uptrend was reaffirmed early in the session when buyers took out $74.77. There wasn’t much of a follow-through on this move, however, which suggests profit-taking or a little selling pressure. A trade through $69.05 will change the main trend to down.
The minor support is $71.99. The short-term support zone is $68.02 to $66.39.
Daily Swing Chart Technical Forecast
The direction of the December WTI crude oil futures contract on Monday is likely to be determined by trader reaction to $73.61.
Bullish Scenario
A sustained move over $73.61 will indicate the presence of buyers. Taking out the intraday high at $74.92 will indicate the buying is getting stronger. This could trigger a surge into the next upside target at $76.07, followed by $76.98.
Bearish Scenario
A sustained move under $73.61 will signal the presence of sellers. This could trigger a further decline into the minor pivot at $71.99. Since the main trend is up, look for a technical bounce on the first test of this level.
Side Notes: Due to the bullish fundamentals traders are going to have to decide whether to continue to buy strength or buy dips.
