Oil up another 1% today above to around $62.50
It is tough to fight the mood in oil as supply issues from the deep freeze and the market focus on the reflation theme has kept prices buoyed to start the year.
That said, despite the enthusiasm, oil is running up against key resistance levels as we look towards the home stretch in trading this month.
The 100-month moving average (red line) has been a key level in recent years – having helped to limit gains back in 2018 – and that is seen @ $62.32.
Adding to that is the key trendline resistance going back to 2009, and that is keeping closer to around $60.56. These levels pose a key challenge to buyers’ resolve in extending the upside momentum ahead of the month-end.
As much as the outlook for oil may be rather bullish, with expectations that supplies are to get tighter in the months ahead, there are some technical challenges for now.
But if buyers can move past that eventually and the 200-month moving average (blue line), $100 may not seem too far-fetched in a commodities ‘supercyle’.