Market Analysis: Oil Surges to a New High of the Year

FXOpen

As the chart shows, the day before yesterday, a barrel of WTI cost USD 87.87, but this morning, the price exceeded the level of USD 93. That is, the growth was more than 6% in just 2 days.

The main driver of such growth remains the voluntary reduction in oil production by OPEC+ countries. Added to this was the market's reaction to yesterday's news about the reduction in oil reserves in the United States (expected = -0.7 million barrels, actual = -2.2 million). Inventories are approaching historical lows, according to Reuters. Probably, the US authorities, by releasing oil from storage, are trying to reduce the impact of its high price on inflation, but the graph shows that these efforts are unlikely to give the desired result.

The A→B decline in oil prices observed since September 19 was merely a correction (shown in red) within a longer-term uptrend (shown in blue). Wherein:

→ the price sharply pushed off from the lower border of the blue channel around 87.5 - we wrote about this scenario earlier;
→ after a short respite, it broke through the median line of the red channel at around 90.25;
→ confidently overcame the level of 91.35, where growth clearly slowed down 10 days ago when approaching point A;
→ exceeded the upper limit of the red channel.

Now it is important for the bulls to gain a foothold at the achieved highs around USD 93. But if the upward impulse has not exhausted itself, then we may witness continued growth towards the upper border of the blue channel.

On the other hand: overbought market, the desire to lock in profits from long positions before the weekend, a possible reaction at the level of statements from the US authorities — all these can become factors contributing to the formation of a correction (for example, to the median line of the blue channel).

Start trading commodity CFDs with tight spreads. Open your trading account now or learn more about trading commodity CFDs with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Commodities

The Price of Silver Has Reached Its Highest Level in Over Three Years Gold Price (XAU/USD) Is Testing an Important Resistance Zone Market Analysis: Gold Price Regains Strength While Crude Oil Price Recovers WTI Oil Price Recovers Quickly From March Lows The Price of Silver (XAG/USD) is Falling for the Second Consecutive Week

Latest articles

Financial Market News

Weekly Market Wrap With Gary Thomson: S&P500, US Dollar, Gold Price, PEP Stocks

Get he latest scoop on the week's hottest headlines, all in one convenient video. Join Gary Thomson, the COO of FXOpen UK, as he breaks down the most significant news reports and shares his expert insights. Read the latest news

Commodities

The Price of Silver Has Reached Its Highest Level in Over Three Years

As indicated by the XAG/USD chart today, the intraday price of silver reached $29.84 per ounce yesterday, while the previous yearly high on 12 April was $29.79. The last time this price was seen was in February

What Is the Wolfe Wave, and How Can You Trade It?
Trader’s Tools

What Is the Wolfe Wave, and How Can You Trade It?

The Wolfe Waves is a powerful chart pattern recognised for analysing potential price reversals. Named after Bill Wolfe, who developed this formation through extensive trading practice, Wolfe Waves provide traders with a structured approach to anticipate market movements. In this

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 60% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.