Fundamental Outlook for WTI
Last week, WTI Oil rose 17% as a result of OPEC+ saying that production curbs will start in November. The need for market stability was reiterated by Saudi Arabia's energy minister last week, who claimed that he had never experienced such uncertainty. With the most recent production cuts, OPEC+ has made it clear that they are prepared to take all action necessary to maintain stable prices and bring them closer to the $100 per barrel mark.
The US is considering whether to draw again from its strategic petroleum reserves in light of the OPEC+ announcement. If the US follows through and demand worries persist, we may experience a price decline before a potential uptrend toward the $100 per barrel level. This would be a fantastic complement to the technological story currently being developed.
Technically speaking, WTI on the weekly chart has produced a Morningstar candlestick pattern while closing above the crucial $90.00 psychological threshold. A second sign of the upward momentum at work was how little upside wick was left on the weekly candle as it closed. Gains to start the week have been capped since the weekly candle has touched the 50-SMA, which is acting as resistance. There is a strong possibility of a pullback at this point given the size and pace of the increase. The better query is: How substantial of a pullback should we anticipate?
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