Crude Oil Set for More Gains as OPEC+ Extends Cuts: $83 Likely Ahead of Key Data
Crude oil is set to have an intriguing week, especially following Friday's breakout. Prices surged even before OPEC+'s weekend decision to prolong supply cuts, suggesting investors may have anticipated such an extension.
Additionally, indications of robust demand from Asia contributed to Friday's surge in crude prices.
A slew of significant data releases and central bank announcements scheduled this week includes the eagerly awaited US nonfarm payrolls report on Friday, so financial markets could be in for a bit of volatility.
Unless unforeseen weakness in global data signals a slump in oil demand, crude prices are likely to continue their upward trajectory, buoyed by last week's bullish breakout and a supportive macroeconomic environment, largely attributed to ongoing OPEC+ intervention.
Before delving into OPEC's recent decision to bolster oil prices, let's briefly examine the WTI chart, which strongly suggests further gains could be on the horizon.
During Friday's surge, crude oil successfully breached a significant resistance range from $79.00 to $80.00, a zone from which oil prices had consistently retreated since November.
With this clear breakthrough, the technical outlook favors further upward movement as we start the new week.
To sustain the bullish momentum, the bulls must defend this newfound ground. If they succeed, WTI may target the upper boundary of its channel, approximately around the $83.00 mark.
Another bullish objective lies at $84.60, aligning with the 61.8% Fibonacci retracement level from the September downturn.
The line in the sand for me now stands at $78.00, the level around which the last rally started in the latter half of last week.
A breach of this level would nullify the breakout signal
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