Technical indicators still show bullish signals, despite a strong rise in the recent weeks. The WTI oil is currently trading above 69 USD a barrel and looks poised to break above the psychological level of 70 USD.
Last week, Saudi Arabia signalled it covets in order to finance the government’s policy agenda and to support the valuation of Aramco ahead of an initial public offering. Technical signals suggest, that the current move higher in prices could persist to a level close to 82 USD. Attention now turns to whether OPEC and its allies will indicate an extension of supply cuts at an April 20 meeting in Saudi Arabia, according to Bloomberg.com.
The strong resistance is at the 50% Fibonacci retracement level on the weekly chart. This zone, exactly at 66 USD, has been tested 3 times already. Another Fibonacci level appears to be around 81 USD. The Stochastic indicator still looks positive from the weekly point of view. There could be a correction of the latest bullish move, which is evident from shorter time-frames, but the weekly chart still looks bullish.
Recent corrections in Brent have shown prices hit a speed bump only when the reading on its Relative Strength Index climbs to 75, well past the usual overbought signal of 70. With that measure now at about 68, it points to continued support for crude on its way up. A return of financial and economic restrictions on the Persian Gulf state could remove 500,000 barrels per day of the country’s crude from global markets, according to one analyst estimate, according to Bloomberg.com.