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WTI halts a 4-day decline, rises to $ 37.50

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 10, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Mumbai) - The US oil snapped losses and edged higher on Thursday, mainly driven by a short-covering rally after the recent slump to more than six-year lows.

    WTI: Higher lows on daily charts, a bullish break likely?

    Currently, WTI trades 0.80% higher at 37.45, holding firmly above 37 barrier. The black gold attempts a tepid recovery from below 37 levels and extends to the upside in the European trades, as markets resorted to profit-taking on their oil shorts after the four back-to-back sessions of heavy losses this week.

    Moreover, an unexpected drop in the US crude reserves as showed by the EIA weekly also lifted investor’s moods after Friday’s OPEC decision refuelled oversupply worries. The US crude oil inventories declined by 3.57 million barrels in the week to December 4, compared to estimates of a rise of 900,000 barrels. That was the first draw in ten weeks.

    However, the recovery is expected to remain short-lived against the back drop persisting supply glut and USD rebound across the board ahead of the weekly jobs data from the US and Friday’s data flow.

    WTI Oil Technical Levels

    WTI oil has an immediate resistance which stands at 37.70 (1h 50-SMA) above which gains could be extended to 38.58 (Dec 8 high). While to the downside, the immediate support is at 36.87 (Dec 9 low), below which the prices could drop to 36.64 (Dec 8 low).
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