WTI CRUDE OIL - USOIL, daily - 03/04/2024 (GMT)

OPEC+ extended production cuts, signaling a response to lower demand and increased output from other producers. The slow but steady rise in oil prices this year has been influenced by tightening physical conditions, geopolitical tensions, and delayed expectations for Fed interest rate changes. The ongoing stalemate in cease-fire negotiations in the Middle East could keep oil prices steady or push them higher, while hedge funds' short positions in the oil market have reached their lowest point since October.


On the technical side, the price is trading in a somewhat aggressive bullish trend and is currently testing the inside resistance area where it reacted in mid and late November of 2023. Also, it is trading exactly on the upper band of the Bollinger bands indicating that volatility is fueled up while the Stochastic oscillator is in the extreme overbought levels. Both these indicators are pointing to the scenario of a possible correction to the downside in the near short term. If this becomes a reality then the first area of possible support could be found around the $78 price area which is the support level of the 38.2% of the daily Fibonacci retracement level as well as the 20-day moving average. On the other hand, if the bulls prove to be stronger than the bears and the bullish momentum keeps at its current pace then the resistance level of $81 might be the first target since it is made up of the 50% of the daily Fibonacci retracement as well an area of price reaction in early November.