Fundamental analysis of WTI for 13.02.2024

The WTI oil price is showing growth, driven by increasing geopolitical tensions in the Middle East and market conditions influenced by the global economic situation. 

For example, Yemen's Houthi militia recently launched a missile attack on a ship bound for Iran, causing minor damage without loss of life. These events, along with signals from Israeli Prime Minister Benjamin Netanyahu to expand military operations and US President Joe Biden's cautious approach to the ground attack in Gaza, have raised questions about the precarious state of affairs in the Middle East and how it affects oil. 

On the economic front, market sentiment is being driven by expectations for US economic reports and the Federal Reserve's interest rate decision. Strong US employment data has reduced expectations of a significant rate cut in the near term, which has had an impact on the strength of the US dollar and yields, which has impacted oil prices. In addition, the oil market is also paying close attention to the US Consumer Price Index (CPI) and Producer Price Index (PPI) data to determine the future direction of movement. 

On the supply side, the focus should be on OPEC's compliance with production limits, especially Iraq's compliance with the 4 million barrels per day limit, as well as the release of US crude oil inventories data from the American Petroleum Institute. The decision by OPEC and its allies to extend production cuts is key to the market's biggest outlook for the second quarter, reflecting the complex balance between supply constraints and geopolitical events driving price trends. In addition, the U.S. Energy Information Administration reported that shale oil production will rise to its highest level in four months, which could impact global supply. 

Traders are also looking forward to OPEC's monthly oil market report to get an idea of global market trends and developments in the oil industry. Overall, WTI oil prices are operating in a challenging environment characterized by geopolitical uncertainty and economic policy uncertainty. These factors combine to create a very positive outlook for the oil market: geopolitical tensions and the OPEC+ decision are likely to support prices.
Technical analysis and scenarios:

The current WTI crude oil price of 77.10 is just below the first resistance level at 77.80. This position indicates that the market is testing the strength of the resistance zone. The proximity to the upper Bollinger Bands at 77.75 further strengthens this resistance zone. The Bollinger Bands are showing an uptrend with a narrowing price range, which usually indicates a decrease in market volatility and a consolidation phase before a potential breakout. As the price is trading in the upper range of the Bollinger Bands, this indicates bullish sentiment among traders, with the potential for a push to higher resistance levels if the upward momentum continues.

Main Scenario (BUY)

Recommended entry level: 77.80

Take Profit: 78.70

Stop Loss: 77.40

Alternative scenario (SELL)

Recommended entry level: 76.10

Take Profit: 75.50

Stop loss: 76.30