WTI rallies above $67.50 as Saudi Arabia increases oil prices
- WTI recovers some of Friday’s losses, reclaims $67.50 amid a positive market mood.
- Saudi Arabia increased the crude-oil barrel to a median of $0.50 to different customers, and oil rose on the news.
- WTI Price Forecast: Has a downward bias, but a break above the 200-DMA paves the way towardsthe 100-DMA at $74.00.
As the New York session begins, the US crude oil benchmark, Western Texas Intermediate, also known as WTI, advances some 2.55%, is trading at $67.86 at the time of writing. A risk-on market mood turned investors toward riskier assets due to some factors. Reports of the omicron variant show that although it is highly transmissible, cases have been relatively mild. Additionally, Saudi Arabia adjusted its oil crude prices, signaling confidence in the demand outlook, despite the spread of the new coronavirus variant.
According to Bloomberg, Saudi Aramco increased its prices by $0.60 for customers in Asia, while in the US, the range is between $0.40-$0.60.
The rise in prices comes after the Organization of Petroleum Exporting Countries, and its allies (OPEC+) decided to increase crude output. The cartel agreed to add 400K of crude to global markets in January, caught investors off-guard amid the discovery of the COVID-19 omicron variant. However, the decision leaves the opportunity to adjust the production after assessing the omicron variant impact.
On the other hand, Iran’s opportunities to rejoin nuclear talks are slim. Iran wants the previous sanctions removed, saying that it violates the deal and prevents the country from gaining economic benefits. According to US officials, even Iranian allies like Russia and China were disappointed by the country’s stance.
That said, coronavirus developments, alongside Iran nuclear talks, would be the drivers for WTI’s price action.
WTI Price Forecast: Technical outlook
In the daily chart, crude oil has a downward bias, depicted by the daily moving averages (DMA’s), which reside above the spot price. Nevertheless, a significant hammer on December 2, when the market witnessed a $6 dip, rebounding to close at $67.50, would keep the black-gold prices within the $62.40-$69.00 range.
That said, in the outcome of breaking above the range, the first resistance would be the 200-DMA at $70.09. The breach of the latter would open the door for further gains. The next resistance would be December 6 at $73.11, followed by the 100-Dma at $74.01.
On the flip side, the first support would be the September 1 at $67.11, followed by the November 30 at $64.42, and then the December 2 low at $62.40