From August 7, so in just two weeks, the price of WTI oil, extracted in the Gulf of Mexico, increased by more than 12 percent. What`s more, the price of oil is trying to break the downward trend line that has been set since the high of mid-July.
The oil market has recently been very sensitive to two issues. One of them is, of course, the trade war and its escalation between the United States and China, because it can lead to a greater slowdown in the global economy and thus lower oil demand, which may put pressure on falling oil prices. On the other hand, the market looks at weekly crude oil stockpiles in the United States.
The American Petroleum Institute (API) reported a fall in inventories by 3.45 million barrels last week. This in turn brings respite to investors concerned about the global economy. What's more, the announcements made by Saudi Arabia about a possible intervention in the oil market, which appeared in the first half of August, also helped.
WTI oil, daily chart. Source: Conotoxia trading platform
As a result, the price of oil defended the previously set support at the level of USD 50.74 per barrel. From this point on, the price of oil climbed up to test the downward trend line again. Today, this line is being broken, and if the bulls manage to close the daily candle above resistance, then the chances of changing sentiment will increase. Then the next target for the bulls may be around previous highs at 58.80 or 60.80 USD.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal Opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
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