Crude oil price traded in the green on the first day of the new week; trading near the 5-month high hit in the past week. Brent futures- the benchmark for global oil – has been in the green for four consecutive weeks. Granted, WTI futures has been in the green for three out of the four latest weeks.
Signs of a tightening global market have been offering support to the asset. Even so, recession concerns continue to weigh on the commodity.
As has been the case in recent months, recession concerns continue to weigh on crude oil’s demand outlook. Besides, the rebounding of the US dollar has also contributed to crude oil price’s curbed gains. Recent economic data pointed to a resilient US economy.
Subsequently, expectations of a dovish Federal Reserve have lessened. This boosted the benchmark 10-year US Treasury yields to a three-week high at 3.60%. As is the case with other dollar-priced assets, an increase in the value of the greenback makes crude oil more expensive for buyers with foreign currencies.
Even so, the recent decision by OPEC+ to further cut its production risk tightening supplies in the year’s second half. This factor, coupled with the persistent optimism over China’s economic recovery continue to support crude oil price. The Chinese GDP figures set for release on Tuesday will likely yield further gains for the commodity.
WTI crude oil price prediction
WTI futures remained close to the five month high of 83.65 hit in mid last week. As at the time of writing, it was trading at 82.64 as it continues to find resistance at 84.34.
A look at its daily chart shows crude oil price still trading above the 25 and 50-day EMAs. About a week ago, the two technical indicators formed a golden cross as the 25-day EMA crossed the 50-day EMA on the upside. This is usually a bullish formation that points to further gains.
In the short term, crude oil price may rebound further as the bulls eye the next target at 85.85. Even so, it may continue to find resistance at 84.34 for a while longer. On the lower side, the support level of 79.12 is still worth watching.