Oil benchmarks rise amid signs of lower US output – Crypto News – Crypto News
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Bulls approach $92.00 resistance confluence Bulls approach $92.00 resistance confluence

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Oil benchmarks rise amid signs of lower US output – Crypto News

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  • WTI increased more than 1% on Friday and found resistance near $81.30, above the 20-day SMA.
  • US Oil and natural rigs decreased for the sixth week in a row.
  • The USD trading neutral allowed the black gold to gain traction.
  • Chinese financial woes may limit the WTI’s upwards momentum.

At the end of the week, the West Texas Intermediate (WTI) barrel rose above the 20-day Simple Moving Average (SMA) of  $81.30, seeing more than 1% gains.

The US reported on Friday that the weekly Baker Hughes Rig Counts decreased to 520 from the previous 525 in the week ending on August 18. In that sense, these figures are pointing at a slump in US Oil production which could exacerbate the global supply tightness, driving the price to the upside.

That being said, the fragile economic situation in China may limit the upside potential for WTI. On Thursday, the Chinese real-state giant Evergrande filed for bankruptcy protection in a US court, which spurred a negative market sentiment on fears of a global contagion. It is worth noticing that China is the largest Oil importer in the world, so a weak Chinese economy would lower the energy demand and hence limit the WTI’s upwards movements.

In addition, the USD, measured by the DXY index, jumped to a daily high of 103.60, its highest since mid-June, due to hawkish bets placed by markets on the Federal Reserve (Fed). On Wednesday, the July meeting’s Federal Open Market Committee (FOMC) minutes showed that members were concerned with the upside inflation risks and left the door open for another hike in this cycle. Higher interest rates and a stronger USD could also challenge oil prices in the upcoming sessions.

WTI Levels to watch

According to the daily chart, the technical outlook for the WTI remains neutral to bullish as the bulls are recovering ground. With an upward trend above its midline, the Relative Strength Index (RSI) points towards a bullish sentiment, while the Moving Average Convergence (MACD) displays weaker red bars. Additionally, the pair is below the 20-day Simple Moving Average (SMA) but above the 100 and 200-day SMAs, implying that the bulls remain in control on a broader scale.

Support levels: $82.00, $83.65, $84.80 

Resistance levels: $81.20 (20-day SMA), $80.00, $79.00  

WTI Daily chart

 

 

 

 

 

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