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Oil, Copper Outlook: US Crude (WTI) Oil Tests 2014 Levels as the Energy Crisis Intensifies

Oil, Copper Outlook: US Crude (WTI) Oil Tests 2014 Levels as the Energy Crisis Intensifies

Tammy Da Costa, Analyst

WTI Crude Oil , Commodities Talking Points:

Oil, Copper & The Energy Crisis – Commodity Fundamentals

Supply chain disruptions in the commodity market continue to weigh on energy prices, exacerbating the effects of the global Covid-19 pandemic.

Although an influx of stimulus has supported the recovery of developed nations, the combination of reduced output from OPEC+ (The Organization of Petroleum Exporting Countries and allies including Russia) and the reopening of economies have enabled oil prices to surge over recent months, pushing the price of US Crude above $80.00 p/b.

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, copper and other industrial metals which have also been impacted by production cuts have also benefited from the supply bottlenecks which will likely assist in the catalyzation of price action for the foreseeable future.

Oil – US Crude (WTI) Price Action

After rebounding off of the August low at $61.74, bulls trading US crude drove price action above the key psychological level of $80.00, currently holding as support.

Although the upward trajectory has enabled oil bulls to enjoy nine weeks of consecutive gains, the weekly RSI (relative strength index) is currently threatening oversold territory, providing additional headwinds for price action.

Oil – US Crude (WTI) Weekly Chart

Oil, Copper Outlook: US Crude (WTI) Oil Tests 2014 Levels as the Energy Crisis Intensifies

Chart prepared by Tammy Da Costa using TradingView

With prices now resting at levels last seen in November 2014, a rising channel on the daily-frame suggests that the upward trajectory currently remains intact (at least for now).

However, with bulls now challenging psychological resistance at $84.00, the RSI remains in oversold territory.

Oil – US Crude (WTI) Daily Chart

Oil, Copper Outlook: US Crude (WTI) Oil Tests 2014 Levels as the Energy Crisis Intensifies

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.

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