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Oil Bullish Rally Continues as OPEC Output Cut Showing Positive Sign

Oil Bullish Rally Continues as OPEC Output Cut Showing Positive Sign

Oil price rose today during the Asian session by extending gains of the last four days. Oil bullish rally continues as OPEC and its allies cuts output which is showing a positive sign for WTI. Can WTI bullish pressure sustain further? What are the charts and technical indicators are saying? Read more to find further insights into today’s WTI Technical Analysis.

May 19, 2020, | AtoZ Markets – Oil is currently trading around $32 area and trying to retrace down. Moreover, the price found support at the dynamic level on the intraday chart. As per the current scenario, the WTI bullish trend may sustain further but may require a retracement before recover higher in the coming days.

Oil Bullish Rally May Sustain Further as Countries Are Easing Lockdown

WTI June contract is going to expire on Tuesday. Still, there was a little sign of repeating the historic drawdown below zero, what we saw a month ago at the end of the May contract. But the demand for crude and derived fuels is recovering from its lowest point. Moreover, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, a group is known as OPEC+ output cut boosted the market very well. Furthermore, OPEC+ has cut its Oil supply sharply in the first half of May.  Besides, Brent crude rose by 2.4% to $35.66 per barrel after reaching its highest level since April and U.S. West Texas Intermediate crude climb by 4.1% to $33.12 after touching its highest level since March.

On the other hand, Hiroyuki Kikukawa, General Manager of Research at Nissan said, “Investors’ sentiment has improved as OPEC+ are apparently slashing output as they promised for this month, with more voluntary cuts expected in June.” He also added, “At the same time, there is growing optimism that the easing of global COVID-19 pandemic lockdowns will help boost economic activity and fuel demand.”

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WTI May Revert Back to the Mean

According to the daily chart, WTI is currently residing near $32 area and trying to push lower. Moreover, Oil bullish rally broke above $27.50 area quite impulsively. As per the current price action, if the price engulfs yesterday’s bullish candle and closes below it, the bears may push the price down towards $27.50 area for a retracement. Apart from this, if the price reaches $27.50 area and bounces higher, the bullish trend may continue towards $36 area in the process.

Oil Bullish Rally

Image: Oil Daily Chart

Furthermore, the dynamic level of 20 EMA is currently residing below the price, along with the Kijun line and Tenkan line. The dynamic level of 20 EMA may pull the price down back to the mean. The Kijun line and Tenkan line may work as a confluence of the dynamic level. Besides, the MACD lines are currently residing above 0.00 level, but the bullish indication is not so strong to sustain further.

To conclude, Oil has gained a good amount of pips amid this Coronavirus pandemic lockdown. The price may take retracement towards the dynamic level before Oil bullish rally continues in the coming days. 

Disclaimer: The views and opinions expressed in this article are solely those of the author and do not reflect the official policy or position of AtoZ Markets.com, nor should they be attributed to AtoZMarkets.

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