WTI breaks below $80.00 despite broad US dollar weakness

Western Texas Intermediate (WTI) US crude oil benchmark barely advances 0.05%, is trading at $79.94 during the New York session at the time of writing. The market sentiment has improved through the American session, as depicted by US equity indexes rising between 0.01% and 0.65%. Meanwhile, the US Dollar Index, which influences the price of crude oil, is declining 0.51%, clinging to 94.00

WTI sluggish advance on Wednesday lies on the back of the OPEC+, which revised lower its estimate for 2021 global oil consumption in its monthly report. Furthermore, the group added that the spike in natural gas prices could boost crude oil use like power generation, but it could curb the demand in other areas such as refining.

Oil has surged due to the rebound in activity from the pandemic, which has increased consumption, depleting inventories. Also, shortages in natural gas and coal have driven demand for the so-called black gold.

WTI Price Forecast: Technical outlook

Daily chart

WTI is trading around the week tops but retreated under $80.00, testing the close of Tuesday’s price action. The daily moving averages are located below the price, indicating that crude oil is in an uptrend. Momentum indicators like the Relative Strength Index (RSI) above 70, in oversold levels, means that WTI could be headed for a correction lower before resuming the upward bias.

In case of a WTI’s correction lower, the first demand zone would be the October 6 high at $79.53. A breach of the latter, WTI could tumble towards the October 7 low at $76.60.

On the flip side, a daily close above $80.00 indicates that oil prices might be headed for consolidation, awaiting for RSI to exit oversold levels before resuming the uptrend.

KEY ADDITIONAL LEVELS TO WATCH