- The oil price has shown a stellar recovery after printing a fresh 15-month low at $65.88 and is aiming to stretch it further.
- US Biden’s denial of further sanctions on Russian oil and revised China’s GDP forecast have supported oil price.
- A bullish reversal has been pinned as the oil price has crossed the critical resistance of $69.00.
West Texas Intermediate (WTI), futures on NYMEX, is making efforts in sustaining its auction above the critical resistance of 68.50 in the early Asian session. The oil price has shown a stellar recovery after printing a fresh 15-month low at $65.88 and is aiming to stretch it further on expectations of a smaller interest rate hike by the Federal Reserve (Fed).
Despite soaring fears of banking turmoil, the oil price has shown a recovery due to the least appetite of the United States for levying more sanctions on oil supply from Russia. US President Joe Biden believes that Russia won’t deliver oil below the current $60/barrel, which could disturb the demand-supply equilibrium.
Also, a surprise upside in China’s Gross Domestic Product (GDP) forecasts has fueled a sense of optimism in the oil price. Goldman Sachs revised 2023 China’s GDP projections higher to 6% from 5.5% anticipated earlier.
WTI has shown a confident recovery after testing a fresh 15-month low at $65.88 on Thursday. The oil price has formed a Double Bottom chart pattern on an hourly scale, which indicates a bullish reversal as the asset re-tested its prior crucial lows with less selling pressure. A bullish reversal has been pinned as the oil price has crossed the critical resistance of $69.00.
The black gold is aiming to shift its auction above the 20-period Exponential Moving Average (EMA) at $68.50, which will underpin a short-term upside trend.
Meanwhile, the Relative Strength Index (RSI) (14) has delivered a range shift move from the bearish territory of 20.00-40.00 to the neutral region of 40.00-60.00, which cements a bullish reversal.
For further upside, the oil price needs to break Thursday’s high at $69.53, which will drive the asset toward the horizontal resistance plotted around $71.00. A break above the latter will further push the oil price to near February 22 low at $73.85.
On the contrary, a downside move below the 15-month low at $65.88 would drag the asset toward 30 November 2021 low at $64.40 followed by 02 December 2021 low at 62.41.
WTI hourly chart
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