Chart of the week – WTI Crude Oil (cash)
WTI Crude Oil (cash) bullish trend intact as OPEC looms
Short-term technical analysisclick to enlarge chart
Time stamped: 27 Jun 2021 at 2:00pm SGT
Source: CMC Markets
- The oil producer cartel, OPEC and its non-members will meet on 1 July, Thursday to decide on the supply level for its oil production for the month of August and thereafter. In the previous meeting held on 1 June, OPEC+ members have agreed on a larger supply of production of around 2 million barrels per day from May to July. Rumours have started to circulate in the market ahead of the 1 July meeting that the cartel has considered an additional increase of 500,000 barrels per day from August onwards to meet rising demand of oil post Covid-19 pandemic.
- Despite the expected incoming increase in oil supply per day, the multi-month uptrend of West Texas Crude Oil (cash) is not showing any clear signs of a reversal from a technical analysis perspective.
- The 4-hour Relative Strength Index (RSI) has continued to push higher above a significant corresponding support at the 52% level and still has room for further potential upside before it reaches an extreme overbought level of 80% seen earlier in January 2021. These observations suggest that short to medium-term upside momentum of price action remains intact.
- 72.30 key short-term pivotal support (defined by the lower boundary of the short-term ascending channel from 21 May 2021 low & the 50-period moving average) to watch for a potential direct rise towards 75.70/76.10 (also a 10-year high) and a break above 76.10 may open up scope for a further acceleration towards the next resistance at 78.40/79.60 (a cluster of Fibonacci expansion levels).
- On the flipside, a 4-hour close below 72.30 negates the bearish tone for a corrective decline to retest the recent post Fed FOMC 17 June swing low of 69.80.