- WTI bulls taking the baton from the bears on Thursday against an otherwise technically bearish backdrop.
- Demand-side fundamentals demand greatly on a vaccine.
WTI is currently trading at $40.19 having travelled between a low of $39.15 and a high of $40.34.
Commodities are performing well as the US dollar starts to show signs of exhaustion in its recent bullish correction.
The CRB index spent the majority of the day in North America climbing between 146.81 to a high of 148.48 to end on Wall Street some 0.4% higher.
However, while oil has been bid on Thursday, overall, the price of oil is giving back gains in a phase of consolidation in the low $40s and there are compelling technical prospects for the downside.
Fundamentally, though, there are continued hopes of a vaccine which should encourage social behaviours towards a rise in demand.
The OPEC put is crucial for energy markets to sustain on the recovery path,
analysts at TD Securities argued.
It’s worth reiterating that OPEC opened the door for an extraordinary meeting in October if oil markets weaken further, which should mitigate concerns surrounding the stalling pace of the recovery in demand, given OPEC’s willingness to fight back against the virus.
WTI technical analysis
In the above daily chart, the price of oil is being rejected by the daily resistance which opens prospects for an approach to the prior structure to the downside.
WTI weekly chart
The price looks to have completed the upside with prospects back to below the $40 area and into the low $30’s, according to the structure.