WTI Crude Oil Finds Support After 5% Drop

The WTI Crude Oil Finds Support After 5% Drop

WTI Crude Oil (NYMEX Futures) wants to keep going up above the $103 mark after finding strong offers below the $102 area.

After a sharp drop on Tuesday, the WTI oil price is going back up.
US oil is helped by the weak US dollar and the fact that inventories are going down.
For the uptrend to continue, the price must settle above the SMA-21 moving average at $103.24.
Concerns about global growth, which made people worry about demand for crude oil and its derivatives, caused the price of US oil to drop by about 5%. Tuesday, the International Monetary Fund (IMF) cut its prediction for global growth in 2022 by almost 1%.

Investors don’t seem to have paid attention to IMF predictions, as a drop of 4.5 million barrels in weekly U.S. API crude oil inventories, a lack of fuel in Libya, and a drop in oil production all point to a worsening situation. OPEC+ raises worries about the supply side and gives the WTI oil price a much-needed boost.

Also, the WTI oil price is getting a boost from the fact that Shanghai is slowly reopening after the Covid lockdown. Also, a general drop in the US dollar is still a big reason why dollar-sensitive oil prices are going up again.

From a short-term technical point of view, WTI Oil’s price closed below the 21-day moving average for the first time this week at $103.24.

But because the 14-day Relative Strength Index (RSI) is still above the 50-point line, buyers are still optimistic about a strong rally.

So, for a steady rise toward the previous day’s high near $108.23, this level must be closed above on a daily basis. Before that happens, the round number of $105 will be a barrier for the bulls to break through.

Daily WTI Crude Oil Chart

On the other hand, if the bulls can’t get a foothold above the 21-day moving average, the market will have to test the SMA-50 moving average support at $100.85.

Then, the psychological level of $100.00 will be looked at as the next big downside target.