Oil prices rose after pullback as optimism of reaching deal prevails
WTI oil regained traction and rose to session high at $26.98 in European trading on Friday, as positive sentiment prevails on fresh hopes of Saud-Russia deal.
Oil prices surged over $5 on Thursday on news that deal is likely to be reached but pulled back after traders took some profits and doubts about deal rose.
Pullback found ground in the zone of Fibo 61.8% retracement of Thursday’s post-announcement acceleration and left a higher base on hourly chart before fresh advance.
Daily studies work in favor of further upside as momentum is in steep ascend, stochastic and RSI head north, the action probes again above 20DMA ($26.01) and 5/10DMA converge in attempts to form bull cross.
Fundamentals are expected to be oil’s key driver as vanishing global demand on coronavirus pandemic keeps the price under pressure but low prices may prompt two biggest oil exporters to compromise and eventually reach a deal which includes significant reduction in oil output.
The deal would further inflate oil prices on reduced risk of markets being flooded with oil and would prompt traders to buy the contract at low prices in speculations that price will rise.
Today’s close above 20DMA would generate bullish signal for attempts towards next significant obstacles -psychological $30 level and $32.76 (Fibo 38.2% of $54.62/$19.24 descend)
Res: 26.98; 27.28; 28.46; 30.00
Sup: 25.14; 24.48; 23.83; 23.32