WTI oil jumped near $54 per barrel (the highest since 23 Nov) on Monday, following weekly opening with 176 pips gap-higher.
Improved sentiment on the latest agreement between the US and China to pause tariff hike for 90 days and give time to try to find solution, boosted oil prices.
Initial signal of reversal was generated on Monday’s open above falling 10SMA ($52.11) which marked initial breakpoint and now acts as support.
Reduced concerns about lower demand on trade war and global oversupply started to fade, with renewed optimism in the market, offer good support for oil prices, which may extend recovery on rising bullish sentiment.
Another factor that could further boost oil prices is reduction of the output, announced by OPEC and Russia, but needs verification on cartel’s meeting due on 6 Dec.
Substantial cut in oil production is needed to sustain recovery, with promising signals coming from OPEC and Russia.
Technical studies are regaining momentum with close above broken 10SMA ($52.11) and 200WMA ($52.31) seen as initial signal.
Further recovery extension and break above falling 20SMA ($55.31) is needed to confirm scenario.
Res: 53.83, 54.80, 55.31, 56.08
Sup: 52.31,52.11, 51.61, 50.44
