Oil eyes upside momentum

WTI tested the support level of 75.50$

By Ahmed Azzam | @3zzamous | 16 February 2024

Oil technical analysis 16-2-2024
  • WTI crude nears $77.5, eyeing second weekly gain.

  • Weak US retail data triggers dollar sell-off, boosting oil.

  • Global demand concerns arise, especially in China.

  • Technical analysis suggest potential upward move, eyes on $78.95 resistance.

Geopolitical support and demand concerns still count

West Texas Intermediate crude oil hovered near $77.5 a barrel on Friday, poised for its second consecutive weekly gain, buoyed by geopolitical tensions in the Middle East and efforts by OPEC+ to restrain oil production. Oil prices surged over 1% on Thursday, propelled by weaker-than-anticipated US retail sales figures that triggered a selloff in the dollar.

Despite these positive indicators, concerns loom over the trajectory of global oil demand. The International Energy Agency cautioned in its latest monthly report of a waning momentum in global oil consumption, citing a notable downturn in Chinese demand. In a downward revision, the agency adjusted its forecast for 2024 global oil demand to 1.22 million barrels per day, down from the previous estimate of 1.24 million barrels per day. Additionally, it anticipated a rise in supplies by 1.7 million barrels per day this year, surpassing its earlier projection of 1.5 million barrels per day.

Oil holds firm at $75.50 support level

Thursday's trading session witnessed a promising rebound in oil prices, reclaiming support levels around $75.50. This upward trajectory follows a series of six consecutive daily gains with only one negative day, starting from levels near $71.40. Bullish momentum continues to underpin oil prices, with trading persisting above the $75.50 mark, potentially finding further support from the 200 and 100 simple moving averages.

Looking ahead, oil could potentially target resistance levels around $78.95, a breakthrough of which may pave the way for further upward movement towards $80.00 and subsequently $82.75.