WTI climbs to a six-week high, trades above $70.00
- WTI rises for a second straight day amid shut-off oil production in the Gulf of Mexico.
- Stormy weather will keep Louisiana and Texas installations off for longer as Tropical Storm Nicholas approaches.
- US investment banks expect higher oil prices in the coming months due to “scarcity” and cold weather.
WTI is trading higher during the New York session, around 70.12, up a decent 1.08%, having posted a six-week high on the back of shut oil production in the Gulf of Mexico after Hurricane Ida. Additionally, Tropical Storm Nicholas, approaching the area, could turn into a hurricane and hit Texas in the coming days.
US investment banks expect high oil prices in the coming months
Oil futures in New York are up 0.87%. As crude oil prices have been steadily climbing, important US investment banks are assessing the crude market. Bank of America said that a colder-than-expected winter could push prices towards $100. At the same time, Goldman Sachs commented that a rally in the black gold could lead to a rally in commodities on the back of solid demand and “scarcity” of supply.
However, the number of rigs operating in the United States grew in the latest week, energy service provider Baker Hughes reported, indicating production could rise in the coming weeks. The increase could put a lid on oil prices; nevertheless, bad weather approaching the Gulf of Mexico shores threatens to extend the re-start of oil on-shore and off-shore installations operations.
Moreover, the Organization of Petroleum Exporting Countries (OPEC) announced that global demand for oil will remain unchanged. This year’s market is estimated at 96.7 million barrels per day, an increase of 6 million barrels on a yearly basis.
WTI Price Forecast: Technical outlook
In the daily chart, WTI’s is trading above the top of a descending channel. A daily close above $70.10 could put upward pressure on oil. The following next supply area would be July 30 high at $74.21. A decisive breach of that level could expose the next resistance levels, being the first one the July 14 high at $75.42, followed by July 6 high at $76.95.
On the flip side, failure at $70.10 could send the prices tumbling down. The first support would be the 50-day moving average (DMA) at $69.57. The next key-demand areas would be the 100-DMA at $69.00, followed by the August 9 low at $65.17.
The Relative Strength Index is at 56.06, aiming higher, supporting WTI’s upside bias.