Covid vaccine hopes and strong drop in crude inventories lift oil price further
WTI oil price climbed to the highest in more than two months on Wednesday, extending steep ascend into third straight day.
Oil price rose above $42 per barrel for the first time since early September, as hopes of effective Covid-19 vaccine boosted expectations for fresh acceleration of demand recovery and bolstered sentiment.
Additional support was provided by American Petroleum Institute report which showed much bigger than expected fall in crude inventories (5.1 million barrels vs 0.9 million barrels drop forecasted).
Oil price rose nearly 12% in past two days, with today’s action registering so far 1.5% advance, as break of pivotal barriers at $41.36 (Fibo 76.4% of $43.75/$33.61) and $41.69/86 (tops of 18 Sep / 20 Oct) opens way towards key resistance at $43.75 (post-pandemic recovery peak).
Bullish daily studies add to positive sentiment, but overbought conditions suggest that bulls may take a breather for consolidation before resuming.
Dips are expected to provide better opportunities to re-enter bullish market, with broken Fibo barrier at $41.36, offering initial support, with deeper dips to find ground above 100DMA ($40.34).
Res: 42.59; 43.00; 43.17; 43.75
Sup: 41.86; 41.36; 41.00; 40.34