OIL WEEKLY ANALYSIS – WTI CAPPING UP FRESH HIGH

OIL
WEEKLY ANALYSIS – WTI CAPPING UP FRESH HIGH

With just four trading sessions left before
the WTI June contract expires, in despite the total number of coronavirus cases
reaching 4.5 million and 300k death reported worldwide by Johns Hopkins and the
market, in general, ignoring the US unemployment claims close to 3 million, the
oil price was able to capped to a fresh high. A whole trading week has cost the
market to shatter its consolidation and finally break the $26 handle.

Market impulse can be attributed to the
additional 1mb/d pledge cut from Saudi Arabia on Monday to take effect next
month in the aim to support the stability of global oil markets, where concerns
remain about the easing of the lockdowns leading to a second wave of COVID-19
cases that could profoundly impact the already crippled demand.

Moving on to the technical side, the chart
indicates a clear bullish bias after the breakout of the flag formation in the
D1 chart. Price action is currently trading above the 50EMA, fighting the
resistance from previous high on April 3rd at 28.63 handle, with sufficient
room for price action to manage and reach next golden Fibonacci level 6.18
where the bullish momentum in MACD and the RSI still far from the overbought
level support the bias. However, we could expect a small correction and price re-testing
the upper line from the flag as long as price action is not able to break the
current level.

This week probably close inarguably bullish,
where the OPEC+ altogether with non-OPEC producers and their 6.6mb/d cuts
response informed on the IEA’s monthly report has given the marker the need
support for this roaring come back.