Oil price climb today as WTI June contract on Tuesday closed without any conflict. Oil broke above $30 area, but the demand anxiety still continues because of Coronavirus pandemic. Can WTI surge further? What are the charts and technical indicators are saying? Read more to find further insights into today’s WTI Technical Analysis.
May 20, 2020, | AtoZ Markets – Oil is currently trading around $32 area and trying to recover higher. Moreover, Oil broke above $30 area quite impulsively and maintained the price above it with a daily close. As per the current scenario, Oil may climb further but may face resistance at $36 area in the coming days.
The American Petroleum Association reported a surprise crude inventory mark of 4.8 million barrels for the week ending on May 15. Investors are optimistic about the production cut by OPEC+ and its allies, including Russia, and some American producers since May are at last impacting the global demand. Besides, Saudi Arabia leading other producer’s countries for further output cuts, which can be starting from June.
Paola Rodriguez Masiu, the Senior Oil Markets Analyst at Rystad Energy, said on an interview with CNBC, “The market sees both forces aligning: the cuts OPEC+ promised are actualized and other non-member production shut-downs are also really helping to limit the oversupply. Meanwhile, lockdown measures had removed globally, and the economy needs fuel to restart.”
Oil Broke Above as Investors Are Optimistic About the Supply Cut
WTI is currently residing near $32 area and trying to bounce higher from the dynamic level. The current market situation is quite volatile and corrective on the intraday chart. But the bullish momentum still exits, which may lead the price further higher in the coming days.
Image: Oil 4 Hour Chart
According to the 4-hour chart, Oil broke above $30 area and currently trading around $32. Moreover, the price found support at the dynamic level of 20 EMA and may strike higher. As per the current price action, if the price can have a bullish impulsive close above the dynamic level and takes out the recent higher high, the bulls may push the price towards $36 area.
Furthermore, the dynamic level of 20 EMA is currently residing below the price and holding the price as support. It may carry the price further higher in the process. Besides, the MACD lines are residing above the 0.00 level, which indicates bulls are still present in the market.
WTI Bullish Trend May Sustain Further in the Process
According to the daily chart, Oil broke above $30 area and had a strong daily close. As per the current price action, if the price reaches $36 area, WTI may face resistance and push down at least towards the dynamic level of 20 EMA. Along with, if the price finds support at the dynamic level and has a daily close above it, the bulls may push the price higher towards $40 area. It should be noted that the $36 area can act as strong resistance.
Image: Oil Daily Chart
Furthermore, the dynamic level of 20 EMA is currently residing far below the price. It may pull the price back to the Mean. In addition, the Stochastic Oscillator lines are residents above the overbought level from an extended period. It indicates that bulls are still quite strong to continue further.
To conclude, Oil has recovered almost 50% of the recent drawdown as OPEC+ and its allies are easing the output cut gradually. As result, the Oil price may recover further in the coming days.