The price of WTI Crude Oil has been in an impressive rally for the last 15 out of 18 days on increasing global oil demand as hopes of restored Iranian oil inventories seems to be fading for the time being. WTI has breached the $72.00/bbl handle, which is it’s highest pricing since October 2008.
Oil prices have continued to build upon the price action and momentum from last week, after reports from OPEC and the IEA (International Energy Agency) indicated stronger-than-usual bullish demand for the commodity for most of 2021. As global economies reopen to pre-pandemic activities, specifically for the USA & China, oil consumption will continue to increase throughout the year, causing analysts to estimate an acceleration in global oil demand to 6 million barrels per day.
When you look at the 4 Hour chart above, you can see that WTI crude oil is trading within an ascending channel. Near term support at the bottom channel trendline currently comes in at the $71.00 handle, which shows confluence with the 4 hour 20 SMA (simple moving average). If price stays above this moving average and $71.00/bbl handle, then WTI could possibly surge higher to test the upper channel resistance at $73.00/bbl. A Daily Close below $70.58 would confirm a break in the trend channel and possible rotation in bias towards a Bearish or Corrective view in oil prices.
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Marvin Perry has been an active trader within the Forex market since 2010. He attended the University of Illinois in Urbana/Champaign, and graduated in 2002 with a double major in Cell and Structural Biology and Chemistry. He currently serves as an FX instructor & Quantitative Analyst for the Forex Anatomy Private Trading Community called "The Lab", where he conducts live weekly trading webinars & instruction on Fundamental Analysis & Inter-Market Interpretations of dynamic asset classes and their influence on currencies.