• Oil gains due to rising expectations ahead of the OPEC meeting, the API release helps as well
  • Oil WTI (OIL.WTI on xStation5) approaches its nearest resistance at $59
  • The important support can be found nearby $57.4

The OPEC semi-annual meeting will take place as soon as next week. Investors look for an extension of the current output cuts possibly by subsequent nine months and therefore they’ve underpinned oil prices of late. In addition the latest API report turned out conducive to the oil market as well showing the largest draw in 3 months. Having said that, one may conclude that market expectations could be inclined to a deeper draw than the estimated 1.3 million barrels which might be supportive of oil prices in the run-up to a DoE release. Nevertheless, there is a risk of disappointment with regard to the OPEC gathering given that a deal extension has been already taken for granted. Now let’s take a look at a technical point of view.

Monthly (MN1)

OIL.WTI managed to break a descending trend line last month and therefore we could try to set other targets for bulls. First and foremost it’s worth paying attention to $59 which is underpinned by a 38.2% retracement, however once bulls want to pursue their rally they need to move above this level approaching possibly a key resistance line placed at $62.8.

link do file download linkOil prices are heading for their relevant resistance but at first they need to deal with a 38.2% retracement. Source: xStation5

Daily (D1)

After a successful test of the highs nearby $55 a further increase could be possible. Nonetheless given that RSI is already hovering around an overbought zone one needs to assume that a pullback could come up when the price nears $59.

link do file download linkDaily RSI calls for a possible deeper pullback. Source: xStation5

Hourly (H1)

Looking at an intraday time frame we could set a few supports using the overbalance strategy. The first one could reach $0.25 whereas the biggest correction has had $1.2 and therefore once the price retreats more than that, it could call into question the ongoing rising sequence. In turn a technical support could be found at around $57.4, albeit an upward trend line could offer some help for bulls as well.

link do file download linkThe closest support at an intraday interval might be found at $57.4. Source: xStation5