Oil Jumped higher as two Libyan oil plants shuts down and Iraq unrest continues. Moreover, Iraq also stopped producing at an oil field on Sunday which lead the market start with an upside Gap. Let’s check Oil Technical Analysis for more levels and insights.
January 20, 2020 | AtoZMarkets.com – Oil opened with a Gap today which started from $58.80 to $59.22 area. After the Gap the price did push a bit lower but the Bullish Rally is expected to continue higher. As per supply demand concern, stopped production in certain Oil field may help the Bulls to continue further without any Bearish intervention.
Sudden Gap on Oil price today is considered as rational response to Libya’s news and provides enough evidence about the Bulls intension. The price is nearing $60 per barrel mark whereas the fundamental may push the price much higher.
In Libya, National Oil Company (NOC) recently stated that two large Oil fields started to shut down as Army closed a pipeline. As a result, if the export slows down with production from 1.2 million barrels per day to 72,000. On the other hand, as OPEC struggling with the production, Non-OPEC may surge in production this year.
Oil to Continue the Bullish Rally?
Oil has been consistent with the Bullish momentum since it bounced off the $57.35 area. The price managed to jump higher with daily open today starting from $58.80 to $59.22. It is currently trying to recover the gap while also reverting to the Mean 20 EMA.
image: Oil 1 Hour Chart
Oil Jumped after Libyan Unrest at the Weekly Open and surged above $59.50 area but could not sustain. As the market opened, the price started it journey from $59.22 and pushed towards current daily high of $59.63. The price is currently retracing lower towards the dynamic level around $58.90 from where it can surge higher again. The dynamic level 20 EMA, Tenkan and Kijun line is below the price line as support. The Chikou Span managed to break above price line while the Kumo Cloud shifted as Bullish dynamic support area.
The price is also forming a U shaped bottom after the impulsive drastic fall off the $65.50 area. As per recent incidents regarding Iran, the Bulls were quite active with the run which may continue as per current Libya and Iraq unrest.
Oil to reach $60 soon
image: Oil Daily Chart
The price in the daily chart is residing between the resistance area of 58.90 to $60.00 area. The price returned lower near $60 with certain Bullish Rejection and continuing lower. After the price bounced off the $57.50 area, the bullish pressure was quite consistent leading the price towards $60.00. In the coming days, if the price manages to break above $60.00 with a daily close, further oil upward pressure to $63.65 is expected.
To Conclude, Oil price jumped higher today as of Iraq and Libya Unrest continues but may retrace lower before continuing the Bullish Rally towards $60.00 and above. As the price remains above $57.50 area with a daily close, the Bullish bias will continue.