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3 April 2024 | FXGT.com

WTI Crude Oil Hits Five-Month High

Upward Momentum: The start of the week marked a pivotal moment for crude oil prices, as they surged beyond the $83 barrier, marking a clear signal for trend continuation. After hitting the initial $85 target, the focus shifts to the $90 mark, a level last reached in October 2023 and serving as a formidable resistance. This level not only represents a previous resistance but also holds psychological significance as a major round number.

Consecutive Gains: This latest surge in oil prices marks a 20% increase since the start of the year, driven by a more optimistic demand outlook and geopolitical tensions. The alignment across various timeframes highlights a unanimous bullish sentiment, painting a promising picture for crude oil’s short-term prospects. Factors contributing to the latest rally include stronger-than-anticipated economic data from the US and China, coupled with a reported decrease in OPEC oil production in February.

Key Support levels: After surpassing it, the $83 mark has transitioned from a barrier to a key support zone for any potential pullbacks, with bullish momentum firmly intact above this level. Any decline below this mark could signal emerging weakness in the prevailing bullish trend. Furthermore, the $80 level, aligning with the daily exponential moving average channel, is identified as the critical support defending the structure of the bullish trend, reinforcing the market’s positive outlook as long as prices remain above this threshold.

Upcoming OPEC+ Meeting: The Organization of Petroleum Exporting Countries (OPEC) and its allies are scheduled to convene today, following a recent declaration to extend the existing production cuts. Analysts and market participants largely anticipate that OPEC+ will maintain its current output reduction policy in the upcoming gathering. Significant policy alterations are expected to be more probable at the June ministerial meeting, where a comprehensive review of market conditions and strategy adjustments can be expected.

US Oil 4 Hour Chart

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