WTI recovers from three consecutive daily losses, bulls target $70.00
- Despite broad US dollar strength, the black gold rises.
- Oil production is struggling to reactivate in the Gulf of Mexico.
- Protests in Libya and Iran nuclear talks lift oil prices.
WTI is recovering from three days in a row of declines, trading at $69.21 at the time of writing. The US dollar index, which influences the price of commodities –including oil–, is up a decent 0.20%, trading at 92.71.
WTI lost almost 4.5% over the past three sessions before staging a comeback on Thursday. Despite broad-based dollar strength, the black gold is finally rising a decent 1.44%.
Oil production in the Gulf of Mexico is delayed. Almost 80% of the US total oil and gas production remains shut after Hurricane Ida struck the shores of Louisiana. Most oil companies are struggling to restart offshore operations. Although the output has been restored to about 300,000 barrels per day, as of Tuesday, the total amount of production shut-in was 1.5 million barrels.
According to S&P Global Platts, Ida has kept almost 20 million barrels off the market.
Additionally, Libyan protests may disrupt crude oil output in Africa, while Iran is not ready to resume talks on a nuclear deal.
WTI Price Forecast: Technical outlook
During the American session, the WTI price action has been tilted to the upside. Oil is approaching the 50-day moving average (DMA) at $69.94. A daily close above the latter could pave the way for higher prices. The first resistance would be $70.00. Once that level is cleared, the next supply level would be the September 2 high at $70.59.
On the flip side, with a failure to a daily close above the 50-DMA, the bears could exert downward pressure on WTI. The first support would be $69.00. A sustained break beneath that level would target the September 1 low at $67.15, followed by the August 9 low at $65.17
The Relative Strength Index is at 53.16, aiming higher, supporting the upside bias.
TECHNICAL LEVELS TO WATCH