Fundamental analysis of WTI

WTI crude oil prices continue to climb at 88.50 after a correction on the back of expected oil supply shortages until the end of 2023 and expectations of continued strong demand in 2024 respectively. 
This scenario hinges on significant and prolonged production cuts by major producers, especially prolonged production cuts by Saudi Arabia and Russia through the end of 2023. The National Energy Agency forecasts a significant market deficit by the end of this year, but warns of the possibility of a significant market surplus in early 2024 if this decline is not sustained. In contrast, the Organization of Petroleum Exporting Countries forecasts that global oil demand will remain strong in 2023 and 2024. These forecasts paint a picture of a balanced oil market in the coming quarters, with geopolitical and economic uncertainty likely to affect Saudi Arabia.
However, the latest data shows unexpected market dynamics. The unexpected rise in US oil and fuel inventories, marked by an increase of 4 million barrels, contrasts with widespread sentiment of tightening supplies. These anomalies suggest weaker demand, possibly due to the end of the US summer driving season. 
The economic context, particularly in the US, also plays a central role in oil price dynamics. The reluctance of the US Federal Reserve to raise interest rates against the backdrop of current inflation may contribute to sustained oil demand. Higher interest rates tend to increase the cost of borrowing, which could negatively impact economic growth and lead to higher oil consumption. Going forward, market participants will also keep an eye on key economic indicators in the US such as initial jobless claims, producer price index, retail sales and preliminary Michigan consumer confidence indicators as these indicators could have a negative impact on the market.
Overall, although producers' production cut commitments are currently supporting tight oil supply conditions and stable demand, the oil market remains vulnerable to short-term volatility affected by changes in oil supply and demand. Oil traders will be vigilant to geopolitical developments and economic signals to determine the future direction of oil prices.
Technical Analysis and Scenarios:

WTI is currently trading near the 88.50 level. WTI is trading near the upper range of the Bollinger Bands. The bands are currently widening, indicating increased volatility. The upward direction of the indicator combined with price action near the upper band indicates bullish momentum. Given the current momentum and the bullish nature of the Bollinger Bands, price could test and possibly break the near-term resistance at 89.00. If WTI fails to maintain the current bullish momentum and a reversal occurs, the price could test support levels. This could happen if market sentiment changes due to external factors or if the price encounters strong resistance near the upper Bollinger Band.
Main scenario (BUY)
Recommended entry level: 89.00.
Take Profit: 89.50.
Stop loss: 88.70.
Alternative scenario (SELL)
Recommended entry level: 87.70.
Take Profit: 86.65.
Stop loss: 88.50.