Crude consolidating below resistance
Crude oil had fallen steadily since Tuesday morning. But it found some support and managed to rally for most of yesterday’s session. It has barely moved so far today, and a look at the chart puts this week’s moves into perspective. Despite some intra-day swings, crude prices continue to consolidate, albeit closer to significant resistance than significant support. Could this be a precursor to another attempt to break out to the upside? As far as front-month WTI is concerned, it hasn’t touched $80 since early November. Since then, all rallies have petered out below here, with the closest attempt being $79.66 in mid-November. Oil has spent far more time testing support around the $70 mark, where it appears to have found a floor, for now. The war between Russia and Ukraine, the ongoing hostilities across the Middle East, and attacks on Red Sea shipping by Iranian-backed Houthis are all playing a part in supporting the oil price. On the flip side, there’s no shortage of supply with US production at record levels. But it’s the outlook for demand growth which is uncertain. And it’s this which is probably the biggest factor in keeping oil prices rangebound.
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