Threat-taking bought merchants shopping for “dangerous” bets like crude oil this week!

However how excessive can WTI crude oil costs (USOIL) fly with its elementary and technical challenges?

In case you missed it, merchants are (cautiously) dumping safe-havens in favor of “riskier” belongings like commodities after the Fed determined to chop its rates of interest by 25 foundation factors and shifted away from the “ongoing fee will increase can be applicable” recreation plan.

It additionally didn’t harm that the Worldwide Vitality Company (IEA) raised its estimate for world oil consumption to report highs in 2023 in anticipation of a surge in Chinese language demand.

WTI Crude Oil (USOIL) 1-hour Chart by TradingView

WTI crude oil costs, which began the week just below final week’s lows, jumped from the $65 mark and hit highs close to $71.50 earlier than coming again right down to the $70 space.

This time, $70 additionally traces up with the 38.2% Fibonacci retracement of this week’s downswing in addition to the damaged 200 SMA resistance on the 1-hour timeframe.

Are we seeing a small pullback earlier than WTI resumes its upswing?

Bullish momentum above $70 opens WTI to a transfer to the $72.25 resistance that served as help from January till mid-March.

Before you purchase crude oil like there’s no tomorrow, although, it’s best to think about that draw back dangers to crude oil costs stay.

For one factor, U.S. Vitality Secretary Jennifer Granholm advised U.S. representatives in a congressional listening to that “it will likely be tough for us to reap the benefits of this low value,” seemingly as a result of they’re in search of even decrease costs. As it’s, Granholm shared that it’s going to take “a number of years” to refill the Strategic Petroleum Reserve.

Russia’s deliberate 500,000 barrels per day additionally isn’t doing a lot to push costs greater because the minimize would come from a better output base than initially indicated.

After which there’s the small matter of the worldwide banking confidence disaster, which might proceed to tug on “dangerous” bets like crude oil.

If WTI drops after which constantly trades beneath $70, then you may think about promoting all the way in which to this week’s lows if not new month-to-month lows.

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