Mid-Week Technical Outlook: Oil Hits Fresh 7 Year High

Buying sentiment towards the global commodity was boosted by supply disruptions coming from Turkey, while the International Energy Agency’s (IEA) bullish outlook on oil markets fuelled upside gains. As fears fade over the demand impact from Omicron and supplies are tightened by a range of outages across the globe, this could propel prices higher. We are just three weeks into the New year but both benchmarks are up almost 15%! It will be interesting to see whether the current upside momentum and fundamentals inspire a move towards $100.

Speaking of prices levels, oil remains bullish on the daily, weekly, and monthly timeframe.

Brent journeys towards $100…

Brent is trading around $87.90 as of writing. This is roughly $12 away from the big $100 level. It is worth keeping in mind that the last time Brent saw $100 was back in 2014.

Looking at the technical picture, there have been consistently higher highs and higher lows. The technical and screaming further upside but it may be worth keeping a close eye on the fundamentals. A solid breakout above $90 could open doors towards $92.40 and $97.00 before the big $100.

Should bulls lose steam before reaching $90, a decline back below $85.80 could be a possibility.

Brent daily chart

WTI Crude not far behind

We see a similar story on WTI Crude as bulls push prices closer to the $100 level.

Prices are trading above the 50, 100, and 200-day Simple Moving Average while the MACD trades to the upside. A strong move above $90 could signal an incline towards $94 and $98 before testing $100.

Alternatively, a drop back below $84.20 may inspire bears to target $78.00.

WTI daily chart

By Lukman Otunuga Senior Research Analyst

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Lukman Otunuga

Lukman Otunuga is a research analyst at FXTM. A keen follower of macroeconomic events, with a strong professional and academic background in finance, Lukman is well versed in the various factors affecting the currency and commodity markets. Lukman provides in-depth analysis on the global currency and commodity markets and is often quoted by leading international media outlets such as: MarketWatch, CNBC, NASDAQ, Reuters, AFP, The Guardian and Yahoo. Prior to joining FXTM, Lukman spent two years as a research analyst with international currency broker FXCM, where he focused on a technical and fundamental analysis of the global currency, commodity, and stock markets. Lukman was also responsible for leading educational seminars for international and local high net worth individuals, and has published a series of educational articles on forex trading with City A.M. Lukman holds a BSc (hons) degree in Economics from the University of Essex, UK and an MSc in Finance from London School of Business and Finance, where he studied corporate finance, mergers & acquisitions and the role of international financial institutions