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Crude Oil Pushes towards $80 per Barrel

Crude oil

The U.S. West Texas Intermediate (WTI) crude oil futures contract continues to push higher toward $80 per barrel. The WTI contract is currently pushing above $78.69 per barrel as higher heating oil and gasoline prices are boosting the price of the black gold. Higher global demand and tighter supply is helping.

This week, the Organization of the Petroleum Exporting Countries and its allies, OPEC +, decided on a nominal increase of daily output of 400,000 barrels per day. This caused crude oil prices to shoot higher, as well.

The United States will publish key monthly labor data ahead of Friday’s non-farm payroll (NFP) labor report. ADP will publish their September non-farm employment change. Cushing will publish weekly crude oil inventory data and the U.S. will release monthly construction purchasing managers’ index.

The European Union will release monthly retail sales data. The Eurozone’s largest economy, Germany, will release IHS monthly construction purchasing managers’ index as well as monthly factory orders. The United Kingdom has no key economic data scheduled for publication on Wednesday.

Daily WTI Crude Oil Technical Analysis

 Looking at the above daily MT 4 price chart, the 14 day relative strength index (RSI) is above 74 and near overbought. This could mean a downward correction for the WTI contract before swing back higher. Price is above $78 per barrel and well above the key daily simple moving averages.

With that said, a daily close above $79 per barrel brings the key psychological level of $80 into focus. The next upside barrier to watch lines up at the round number of $90 per barrel. The next layer of technical resistance lines up at the January 2014 low price point of $91.20.

If prices cannot close above $79, the first downside barrier lines up at $78 per barrel. The 6 July high price of $76.95 then comes into focus before the 13 July high price point of $75.48 per barrel.

About David Frank

David has his MA and PhD in Economics. He is a technical analyst who has been trading in the Forex world for over a decade. As an analyst and trader, David believes in the big picture by blending together technical analysis with the fundamentals behind the scenes in the Forex and Bond markets. David’s trading strategy is unique. He blends an understanding of fundamental and macroeconomics with technical analysis to offer a unique view into Forex. He applies several strategies including carry long positions, to take advantage of high yields in non-volatile markets, as well as using quicker, chart related analysis for day trading.

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