General analysis WTI for 05.10.2021

Current Dynamics

Yesterday the price of WTI crude oil renewed seven-year highs after a meeting of OPEC+ agreement participants.

The major oil producers did not back down from the plan, despite the increase in demand amid a strong rise in the price of natural gas. OPEC+ is set to boost production by 400 k BPD in November as planned. According to Saudi Aramco, the sharp increase in the price of gas has led to increased demand for oil, about 500 k BPD, as oil is cheaper than natural gas for the consumer. At the same time, OPEC+ members are already discussing in private conversations the option of increasing production by 800,000 BPD. It is very smart of OPEC+ to convene frequent conferences, as this allows them to adjust production parameters in accordance with supply and demand forecasts in the market.

Today at 23:30 (GMT+2) the API will release data on weekly changes in U.S. crude oil inventories. A rise in inventories will not put much pressure on the trading instrument, while a contraction will help WTI price reach the 79.50-80.30 range.

Support and resistance levels

On the 4-hour chart, the instrument is strengthening at the top of the Bollinger Bands. The indicator is pointing upward and the price range is widening, indicating a continuation of the uptrend. MACD histogram is holding a buy signal. Stochastic is leaving the overbought area, forming a sell signal.

• Support levels: 76.74, 75.95, 74.40, 73.10.
• Resistance levels: 77.85, 78.80, 79.50, 80.00, 80.30.

Trading scenarios

• Long positions can be opened at the current price with a target of 79.50 and a stop loss at 77.25. Implementation period: 1-2 days.
• Short positions should be opened below the level of 77.25 with a target of 75.80 and a stop-loss at the level of 78.15. Implementation period: 1-2 days.