- WTI rallies 1.50% on Saudi’s upbeat demand view, Iraq output cut.
- Upbeat Chinese data also boost oil, with eyes set on $42.30.
- US oil holds above a bunch of healthy support levels.
WTI (futures on Nymex) climbed nearly 1.50% in a bid to test the $42 mark on Monday, in the wake of the upbeat outlook painted by Saudi Aramco’s CEO Nasser and expectations that Iraq will cut output in August.
Further, slowing Chinese factory deflation also added to the strength in the black gold, as China is the world’s second-largest oil consumer.
From a short-term technical perspective, the price is forming higher lows on the hourly sticks while recovering above all the major hourly Simple Moving Averages (HMA).
The next upside target for the bulls is the $42.30, the critical horizontal trend line resistance. A break above which could trigger an extensive rally in the US oil.
Meanwhile, the recovery momentum remains intact as long as the price holds above the $41.77 level, the confluence of the rising trendline support and horizontal 21-HMA.
WTI could then target the horizontal 200-HMA at $41.35 should the selling pressure intensify.
WTI hourly chart
WTI additional levels to watch