WTI Crude Oil , Commodities Talking Points:
- US Crude oil (WTI) prices tested above $84.00
- Energy prices and COP26 climate conference remain at the forefront of risk sentiment
- Coal shortages may further support oil prices as China struggles with supply
While the combination of reduced output from OPEC+ (The Organization of Petroleum Exporting Countries and allies including Russia) and supply shortages have driven energy prices higher, the battle between climate change and inflation currently remain at the forefront of the COP26 summit.
These rising prices have in turn had a domino effect on food and transportation costs, weighing heavily on consumers who are beginning to feel the effects of inflation.
Likewise, metals and other commodities affected by the supply bottlenecks have further exacerbated rising production costs for manufacturers.
Oil – US Crude (WTI) Price Action
A strong rebound off of the August low ($61.74) has thus far allowed bulls to gain control of the systemic, prominent trend as supply constraints continue to weigh on oil and gas prices.
While fundamental factors will likely continue to assist in the catalyzation of price action for the foreseeable future, a drive towards the $90.00 handle may still be in the cards for the next few weeks.
Oil – US Crude (WTI) Monthly Chart
Chart prepared by Tammy Da Costa using TradingView
With price action now testing October 2014 levels, the rising channel that was identified in last week’s analysis will likely continue to provide both support and resistance for both the short and medium-term move.
With prices now testing the key psychological level of $84, the relative strength index (RSI) remains in overbought territory, suggestive that the uptrend remains the prominent force, at least for now.
Oil – US Crude (WTI) Daily 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
