After slipping below 28.00 earlier this week, WTI crude oil price CFDs crawled up the charts in yesterday’s trading. The commodity steadily traded higher after opening at 30.28 and finished the day at 34.75.
There have been no new developments in the oil price war between Saudi Arabia and Russia. The former has announced that it would ramp up oil production to 12.3 million barrels per day beginning on April 1. This is 25% higher than what it produced in February at 9.7 million barrels per day. In response, Russia has announced that it would ramp up its production by 500,000 barrels per day.
On the more optimistic side of things. Russia’s energy minister said that the country is open to talks with OPEC members. Yesterday’s movement on WTI crude oil price may have been triggered by optimism that perhaps the two countries could still come into an agreement. OPEC is scheduled to meet in May or June of this year.
WTI Crude Oil Outlook
On the monthly time frame, we can see that WTI crude oil CFDs fell to its February 2016 lows. There were enough bids around the 30.00 psychological handle for the commodity to recoup some of its losses.
Zooming into the daily time frame, we can see that a bullish engulfing candlestick pattern has already materialized. In forex trading, this is considered as a bullish confirmation signal. If there are enough buyers in the market, we may soon see WTI crude oil price CFDs trade higher to the confluence of resistance at the 44.00 psychological handle. For one, this price seems to coincide with the falling trend line when you connect the highs of January 8 and February 20. Secondly, the 61.8% Fib level coincides with it when you draw the FIbonacci retracement tool from the high of February 20 to this week’s low.
Alternatively, if risk aversion once again dominates market sentiment, we could see crude oil price fall back to its 4-year lows at 27.22.