Strong recovery extends above $40 as OPEC+ presses for better compliance in production cut
WTI oil hit two-week high on Thursday in extension of Wednesday’s 4.4% advance, inflate by significant drop in US crude stocks.
Oil holds in green for the third straight day, as bullish acceleration was sparked by the tropical storm which shut the most of oil installations in the Gulf of Mexico and boosted after both reports (API and EIA) showed strong fall in crude inventories.
Additional support came from OPEC+ group on Thursday as main world oil producers pressed for better compliance with production cut, to prevent further fall in oil prices on rising uncertainty over the global economic outlook.
Wednesday’s rally generated strong bullish signal on return and close above psychological $40 barrier.
Today rally through falling 200DMA ($40.36) test of another key hurdle at $40.83 (Fibo 61.8% of $43.75/$36.11 correction, adds to positive signals with close above $40.83 needed to confirm.
Bulls face more obstacles en-route, with top of thick daily cloud ($41.26) and Fibo 76.4% of $43.75/$36.11) being already in focus.
Improving daily techs underpin the action, with stronger positive signals developing on weekly chart, as oil is on track for bullish weekly close after two consecutive weeks in red and also forming bullish engulfing pattern, which could further boost the rally.
Res: 41.11; 41.26; 41.95; 42.50
Sup: 40.36; 40.00; 39.40; 39.03