US oil price benchmark West Texas Intermediate (WTI) gained more than 6% since the start of June and reached the highest level since 2018. On a weekly, the WTI oil price closed above the $70 area on Friday. The recent rally supported by the expectation for a further recovery in the fuel demand after the passing of a massive stimulus package and output cuts from major producers.
Key factors behind crude oil price rally this month
OPEC and its allies agreed to continue to boost output, in the last meeting they recommended sticking with the group's policy to increase crude production in June and July.
Last week, the top US diplomat said that even if the US reached a nuclear agreement with Iran, hundreds of US sanctions against Tehran would remain in place. His comment reduced expectations for a rapid increase in the supply of Iranian oil to the market.
OPEC bullish on oil demand recovery. "Overall, the recovery in global economic growth, and hence oil demand, are expected to gain momentum in the second half," OPEC said In June monthly report.
The oil prices also received additional support after the world's third-biggest oil importer India has begun easing its latest blockade.
WTI fundamental weekly forecast
This week, the oil investors and traders across the globe waiting for fresh updates about the US -Iran nuclear deal as the nuclear talks in Vienna have restarted during the weekend. So far there have been no real breakthroughs in the discussions, although caution remains as the possibility of Iranian oil exports coming back will drag crude oil prices lower.
On the other hand, Wednesday’s oil inventory report is again a must-watch for this week. The last week EIA report showed a bigger-than-expected drop of 5.241 million barrels in US crude inventories, but gasoline stocks increased by 7.046 million barrels.
What’s next for WTI $75 or $65?
On Monday, the WTI closed slightly lower after reached $71.40 earlier in the session, its highest since October of 2018. In the short-term perceptive, the immediate bias will remain bullish as long as prices are held above 70.00. Considering the bullish momentum this week the resistance for WTI is around 72.00, any break over targets 72.30/73.00. On the other side, the immediate support is at 70.40 and any break will drag the oil price to 69.80/69.10 levels.
In the long term, it should find resistance in the area of 75/76 where the price has strong resistance. On the downside, any meaningful pullback now seems to find some support near the 68.50 zones, below which the slide could further get extended towards the 67.00/65.50 region.
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