The recent rise in the price of WTI crude oil by approximately 1% on Monday has been attributed to several key factors. One of them is the upcoming OPEC+ meeting scheduled for 2 June. Additionally, there are expectations of high fuel demand with the start of the summer driving season and holiday season in the US. These bullish sentiments have contributed to the positive movement in oil prices.
A technical analysis conducted on 10 May revealed the formation of an ascending channel in blue, suggesting a scenario of continued price growth within this channel. Despite the bears’ attempt to break the low of 8 May at the level of 76.68, there was a false breakout indicating a bullish sign. A similar pattern occurred on 24 May, further solidifying the upward momentum in oil prices. The strong behavior of WTI crude oil prices on Monday reinforces this positive outlook.
Analyzing the XTI/USD chart, it is evident that the price movement in April-May forms a descending channel in red. This decline since 5 April may be seen as a correction within the larger ascending blue channel identified earlier. Despite briefly dipping below the lower boundary of the blue channel, the price has returned to it, indicating a potential end to the corrective movement. The proximity to the upper boundary of the descending channel suggests favorable conditions for the resumption of the upward trend by the bulls.
The bears’ inability to sustain new lows in WTI oil prices may serve as a catalyst for the bulls to drive the prices upwards. Additionally, news related to the upcoming OPEC+ meeting could further contribute to this positive development in the oil market. These factors combined create a favorable environment for potential price growth in the near future.
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