Crude Oil Outlook: WTI Prices Climb, Supply Constraints Support Higher Prices
Crude Oil, WTI, Brent – Talking Points
- Crude oil prices continue to soar as supply constraints remain intact
- US Crude (WTI) breaks above key psychological level of $75.00
- Brent crude rises above $80.00 for the first time since 2018
Brent Crude Claims $80/b, WTI eyes $77/b
Over the past few weeks, oil prices have continued to proceed along an upward trajectory as commodity shortages remain a key concern for global economies.
With inflationary pressures on the rise, heightened volatility and production concerns have supported the strong rise in commodities, pushing Brent crude to $80.00, a level last tested in 2018.
Oil – US Crude (WTI) Price Action
After four consecutive weeks of gains, WTI crude oil is currently testing a key level of resistance at the psychological level of $76 in an effort to reclaim the July high at $77.11.
If bulls are able to push through the key level of resistance at $77, a breakout towards $80.00 may be in the cards. However, fears of higher wage inflation from the US could increase hawkish Fed monetary policy expectations.
That may hurt WTI, and increased selling pressure could result in a resumption of the bear trend and a possible retest of psychological support at $70.00. Still, it seems that in the near-term, demand is poised to outstrip supply.
US Crude Oil (WTI) Daily Chart
While the 76.4% retracement of the July – August move will likely continue to provide support for the longer-term move at $73.47, the commodity channel index (CCI) has risen above 100, a potential indication that WTI may be entering into oversold territory.
US Crude Oil (WTI) Weekly Chart
Chart prepared by Tammy Da Costa using TradingView
--- Written by Tammy Da Costa, Analyst for DailyFX.com
Contact and follow Tammy on Twitter: @Tams707
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.