Crude oil price has begun the week on a lower note as the rising COVID-19 cases create a hurdle to the recovery of the global oil demand. Last week, a decline in US oil inventories, strong economic data from China and the US, and positive demand forecast from IEA and OPEC fuelled the rallying of oil price.
However, the pandemic remains a hindrance to the smooth recovery of global oil demand. India recorded over 270,000 new cases on Monday. This makes it the second most affected country after the US.
Furthermore, Japan is concerned about the possibility of the fourth wave of infections. In the ensuing sessions, investors will be keen on how the pandemic, US inventories data, and IEA global energy review will impact crude oil price.
Crude Oil Price Technical Outlook
Crude oil price is on a consolidation pattern after its upward momentum in the past week. Last week, WTI futures managed to move past the important resistance level of 62 after surging from the week’s low of 58.72. Subsequently, the bulls’ next target was $64, which would have been its highest level since 18th March. However, with the rising COVID-19 cases, there not enough buying pressure to push the price to that level.
On Monday, WTI futures are down by 0.18% at $62.95. This is a decline from last week’s high of 63.84. However, on a 4-hour chart, it is still above the 25 and 50-day EMA.
In my opinion, crude oil price will continue experiencing resistance at 64 in the near term as investors await IEA’s Global Energy Review. Depending on the details, the bulls may manage to push the price past 64. If that happens, the commodity could reach just below the next resistance level of 66 at 65.30. On the flip side, the price could move lower to find support at 62.
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