Crude oil price stabilizes above $73, a striking distance of eleven-week tops reached last Friday. The black gold now extends its Asian bullish consolidative mode into Europe. What is next?
1 October, GKFX – The strength in the US oil is mainly driven by the rally in its European counterpart, Brent, as the concern over supply disruption begin to bite, as the US sanctions on Iran’s oil sector come into force from Nov, 4th.
WTI Stabilizes Above $73: Eyes on $74
Meanwhile, persisting risk-on market environment, as reflected by higher European equities and rising Treasury yields on a new US-Canada trade deal, also help underpin the sentiment around the higher-yielding oil.
Further, the renewed weakness seen around the greenback could offer the extra boost to WTI’s bullish momentum, as the 74 handle now looks within reach.
Additionally, in an evidence of increased investor confidence in the barrel of WTI, the hedge funds and money managers increased their bullish bets on oil. The latest CFTC data showed, the combined net long position in Brent and WTI futures and options at its largest since late July, equivalent to about 850 million barrels of oil.
The focus now shifts to the US ISM manufacturing PMI release, which will offer some near-term trading opportunities to the USD-sensitive oil.
WTI Technical Levels
Resistances: $ 73.73 (11-week tops), $ 74 (round number), $ 74.50 (psychological level).
Supports: $ 73 (key support), $ 72.77 (5-DMA), $ 72.09 (10-DMA).
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