Oil prices hit new multi-year high, lifted by improved demand outlook
WTI oil price extends advance and hits the highest in nearly three years in early Monday’s trading, following bullish signal generated on last week’s close above psychological $70 barrier (the first weekly close above this level since mid-Sep 2018), with oil benchmarks extending rally into third consecutive week.
Improved outlook for fuel demand on tightness in supply and accelerating economic recovery on increased vaccination, underpin the action.
Eased lockdowns also boosted air transport while motor vehicle traffic returning to pre-pandemic levels in the US, adding to positive signals for global demand, however, fresh virus threats in Europe and India could cause headwinds to larger bulls.
Strong uptrend remains fully in play with dips to provide better buying opportunities.
Bulls eye pivotal Fibo barrier at $73.44 (61.8% of 114.80/$6.52, 2011/2020 downtrend) break of which would generate strong bullish signal and expose 2018 peak at $76.88.
Initial supports lay at 70.70/40 (session low / rising 5DMA) with dips to be ideally contained at $70.00/$69.60 (broken psychological barrier / rising 10DMA).
Res: 71.55; 72.00; 72.38; 73.44
Sup: 70.70; 70.40; 70.00; 69.60