Oil price rose to five-week high on renewed supply concerns
The WTI oil is consolidating under new five-week high ($80.90) in early Tuesday, following strong acceleration higher in past few sessions.
Oil price was lifted by fresh supply concerns, mainly due to growing concerns about the disruption to Russia’s exports of oil and refined products, which partially offset mixed trade data from China.
China’s exports improved significantly in February, boosting hopes that post-Covid recovery is picking up, but import dropped well below expectations and previous month’s level.
Recent rally improved daily technical studies, as momentum indicator broke into positive territory and moving averages (10/20/55) turned to bullish configuration, with fresh positive signal being generated on break above 100DMA ($79.79) and psychological $80 barrier.
However, overbought conditions warn of some profit-taking, which would pause bulls for consolidation / shallow correction.
Dips should find ground above solid supports at $78.00 zone (Fibo 38.2% of $73.77/$80.90 bull-leg / converged 55/20DMA’s) to keep fresh bulls intact for attack at key barriers at $81.91 (50% retracement of $93.72/$70.09 descend / $82.64/61 (January tops, also the ceiling of larger range since mid-December).
Weekly reports from American Petroleum Institute (API), due later today and Energy Information Administration (EIA) due on Wednesday, are eyed for fresh signals.
Res: 80.90; 81.17; 81.91; 82.61
Sup: 80.00; 79.79; 79.22; 78.18