Home Forex Oil continues to flog on Friday, but higher on the week as WTI moves towards $75

Oil continues to flog on Friday, but higher on the week as WTI moves towards $75

by SuperiorInvest


  • Oil markets hit a fresh one-week high before settling on Friday.
  • WTI is trading between $74.50 and $73.00 on Friday.
  • Freezing temperatures and geopolitical tensions weigh on supply concerns.

Crude oil futures were broadly higher during the week in jittery trading that saw frequent peaks and dips to highs and lows. West Texas U.S. Intermediate (WTI) crude settled near $73.60 for the week, with a 5.6% or $3 spread between late Friday’s late weekly high of $74.60 and Wednesday’s weekly low of $70.62.

Broad market concerns about production cuts by the Organization of the Petroleum Exporting Countries (OPEC), which plagued energy markets for much of the third quarter of 2023, have all but disappeared, replaced by broad market concerns that Iran-backed Houthi rebels are targeting civilians. ships in the Red Sea will impede critical global supply lines between Europe and Asia.

Bullish Oil prices on the supply side, pressure on the upside has eased significantly, with the US reaching record levels of oil production in 2023 and pace continuing to increase barrel output.

Canada is also poised to hit new production highs as Alberta crude producers boost production as the Trans Mountain pipeline nears completion, making it easier for the oil-exporting country to add its light sweet crude supplies to the US. logistics chain. As the world’s fourth-largest producer of crude oil, Canada is poised to propel the U.S. even further to the top of the rankings as a global net producer and exporter of downstream petroleum products.

Despite the historical surplus in semi-refined oil products, a decline in crude oil supplies is drawing a line under barrel prices in the near term as energy markets expect a firmer outlook for the global oil supply balance.

WTI Technical Outlook

Choppy trading as markets get pulled in both directions leaves oil traders stretched along the mid-range, with WTI testing familiar territory near $74.00. WTI has been cycling a key price handle in a tightening pattern since the move down to the neighborhood in early November, and the sideways grind on the WTI chart has the 50-day simple moving average (SMA) falling into intraday territory.

The 200-day SMA is accelerating the decline from the $78.00 handle, which will add bearish pressure to near-term price action to the downside if the bulls fail to push WTI back through the medium-term technical resistance at the $76.00 handle.

WTI Daily Chart

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