WTI price continues to rise on growing supply concerns
WTI oil extends gains on Wednesday and hit new highest levels since October 2014, driven by supply concerns, boosted by fresh supply disruptions caused by a fire on a pipeline between Iraq and Turkey, which briefly stopped flows, adding to already tight supply outlook, along with existing tensions between Ukraine and the OPEC member Russia.
Some oil producers from the OPEC are struggling to pump their allowed capacities under the agreement to add 400,000 barrels per day each month, while analysts expect that tight supply and rising demand would push oil inventories to the lowest levels since 2000 by the summer, boosting expectations that oil price would rise above $100 per barrel this year.
Technical studies on daily chart remain in bullish setup, while the price actions were supported by rising thick weekly Ichimoku cloud.
WTI contract is on track for the second consecutive strong monthly gains that adds to positive outlook. Near-term action keeps the focus at the upside after completion of $85.39/$62.42 corrective phase.
Bulls eye round-figure $90 level and Fibonacci projections at $90.81 and $94.16 (123.6% and 138.2% respectively), violation of which would expose psychological $100 target.
Corrective dips on overbought conditions face initial support at $82.10 (rising daily Tenkan-sen) and should find solid ground above $80 level to keep bullish stance and offer better opportunities to re-enter bullish market.
Res: 86.38; 90.00; 90.81; 92.94
Sup: 85.39; 83.55; 82.10; 81.00