WTI oil surged to the highest since October 2018 on Monday ($ 67.95) as the sentiment further improved after the US Senate passed a $ 1.9 trillion economic stimulus package, while an attack on Saudi’s oil installations by Yemeni groups further lifted the prices.
Oil advanced nearly 7% last week after OPEC+ group decided to extend its production cuts into April that offset concerns about fragile demand recovery due to extended lockdowns in a number of countries and record build in US crude stocks due to a harsh weather in the US south.
The oil prices have fully recovered strong loses during the pandemic and jumped well above the levels where they stood when the crisis started.
The recovery is currently riding on the third wave of five-wave cycle from April’s 2020 low at $ 6.52 and eyes key obstacles at $ 70 (psychological) and $ 70.93 (Fibonacci 100% expansion), break of which would generate strong bullish signal and open way for further advance.
Bulls are expected to face headwinds here (overbought daily/weekly studies also to contribute) and may take a breather for consolidation.
Expected dips to provide better opportunities to re-join bullish market, with former high at $ 63.79 (Feb 25) and rising 10DMA ($ 62.67) expected to contain and keep bulls intact.
Caution on extension below rising 20DMA ($ 61.22) and March 3 trough ($ 59.22) that would signal deeper correction.
Res: 67.95; 68.36; 69.00; 70.00
Sup: 65.75; 63.79; 62.67; 61.22