Lower production and growing demand!

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WTI analysis – 18 May 2020

By: Ahura Chalki

Gold gains over 5% on the first day of the week, after lower production from Saudi Arabia, UAE, and Kuwait, while “U.S. energy firms cut the number of oil and natural gas rigs operating to an all-time low for a second consecutive week. That partly helped ease concerns about the WTI contract’s delivery point in Cushing, Oklahoma, running out of space” (investing.com).

On the other hand, easing lockdowns in most European countries as well as China, helped the demand to grow up. Most of the EU members planning to open the borders, as newly infected cases of coronavirus are lowering. Last week’s industrial production data from China also showed a small gain, which turned a light of hopes.

For the week ahead, economic data will be matter after a long while just coronavirus headlines were leading the market, however, new concern about the US and China trade relations will be in the spotlight, especially after Trump’s recent threat to pull out of the trade deal with China.

WTI technical overview – Daily chart

Black Gold entering the overbought area, while since Friday, it could pass the 38.2% of Fibo retracement (from January high), sitting at $29. Technical indicators supporting the bulls and above Key level of $29, bulls can control the market. On the flip side, breaching under $26 will open the doors for $24 and $21.

Pivot point: 29.05

Resistance levels: 30.90 / 31.73

Support levels: 28.24 / 26.37

Today, the expected trading range is between 26.37 support and 31.73 resistance.


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