Oil price rise as hurricane approaches US Gulf Coast but concerns demand recovery persist
WTI oil jumped almost $1 during European session on Tuesday as hurricane Sally approached the US Gulf Coast on Tuesday morning.
This is the second storm in less than a month to threaten the region and cause disruptions in refineries and oil platforms.
Fresh rise drives the oil price above week-long triangle-shaped congestion after steep fall from $43.75 recovery peak found firm ground, contained by rising 100DMA and rising daily cloud base.
Oil price was strongly pressured by fears that global oil demand recovery is stalling as the pace of economic recovery from the pandemic is slowing.
The latest report from International Energy Agency which trimmed its oil demand forecast for 2020, expecting global demand to slow for the rest of the year, adds to concerns.
Today’s advance would generate initial bullish signal and add to reversal signals on close above the upper border line of the triangle, however, more action higher on penetration of daily cloud base ($38.87) and pivotal Fibo barrier at $39.03 (38.2% of $43.75/$36.11) would be required to confirm scenario.
Conflicting daily indicators (momentum remains negative, stochastic and RSI heading up and MA’s are in full bearish setup) so far do not provide more significant support to current advance.
Res: 37.99; 38.53; 39.03; 39.55
Sup: 37.50; 37.04; 36.81; 36.65