Crude oil price has entered the new month steady above the crucial resistance-turn-support level of $70. Notably, this has been the case for the past one-and-a-half weeks. Optimism on global oil demand continues to offer support to the prices. Even as the Delta variant continues to spread aggressively in different parts of the world, heightened vaccination is likely to lower the need for stringent lockdown measures.
However, reduced factory activity in China has triggered concerns over the probable pullback in the global economic recovery. The largest consumer of crude oil, whose pace of economic recovery has ranked top in Asia, recorded the lowest manufacturing PMI since April 2020. Subsequently, crude oil price dropped to an intraday low of 72.74 earlier on Monday.
WTI oil technical analysis
Crude oil price has begun the new month steady above the psychological level of 70.00. Two weeks ago, WTI futures had dropped to a two-month low of 65.15 before rebounding. At the time of writing, the benchmark for US oil was down by 0.48% at 73.31. On a two-hour chart, it is trading along the 25-day EMA and slightly above the 50-day EMA.
In the near term, I expect crude oil price to continue finding support along the 50-day EMA at 72.73. On the upside, the bulls will have to break the resistance at Friday’s high of 74.20 to get to the next target at 75.00. On the flip side, a move below its current support level will have the bears eyeing the lower level of 72.00 and 71.00.