WTI up over 1% to $82.20 levels on the day
After some exhaustion at the highs around $85, WTI slipped back below $80 on Thursday last week only to recover strongly on Friday – helped by a weaker dollar.
The push back above the figure level is now leading to buyers contesting for near-term control once again with the key hourly moving averages seen @ $81.52 and $82.30.
That is the key battleground for today but the daily chart exemplifies how tough it is for sellers to really get any momentum going in the big picture, with buyers quickly stepping in on a drop just below the 23.6 retracement level @ $79.82.
I still maintain that oil may be vulnerable to a sharper pullback/correction after the unrelenting push higher from late August to October. But in keeping above $80, buyers are showing plenty of conviction in trying to maintain the upside push for now.
If price fails to really crack $85 once again, perhaps there is scope for added profit-taking and yet another sharp pullback as seen last week. However, the long-term fundamentals for oil are still looking great and OPEC+ is also still playing ball to underpin prices.
As long as that keeps up, oil is still likely to trend higher in the months ahead so long as the overall outlook holds up as it is now through 1H 2022. But that doesn’t mean one should rule out a potentially big/sharp squeeze lower before the next rally comes along.