WTI oil price rose to two-week high above $24 on Tuesday, extending recovery into sixth consecutive day.
Renewed optimism in the markets on reopening after lockdown in several countries and US states, inflates oil prices as traders extend fresh longs on hopes for increased fuel demand.
Vehicle traffic is expected to boost demand and narrow huge disbalance between offer and demand, with industry to start gradually and air traffic expected to take more time to emerge from deep crisis.
Signs of reversal are developing on daily chart, with the initial one generated on oil price being above psychological $20 level for the second day.
Rising bullish momentum underpins recovery, although strongly overbought stochastic warns.
Recovery eyes barrier at $26.82 (17 Apr high) break of which would expose key obstacles at $29.10 (Fibo 38.2% of $65.63/$6.52 fall) and psychological $30 level.
Broken $20 barrier now offers strong support which is expected to hold and maintain fresh bullish bias.
Traders await release of US crude stocks reports (API report is due later today and EIA on Wednesday) which are expected to provide more evidence whether US crude inventories’ rise stagnates (according to forecasts) or starting to decrease.
Negative signal could be expected if crude stocks rise above last week’s levels.
Res: 24.91; 26.82; 28.32; 29.10
Sup: 22.69; 22.07; 21.15; 20.35
