Oil up 1% today to around $ 62.50
Oil sentiment is tough to fight as supply issues from the deep freeze and market focus on reflation themed kept prices strong to start the year.
That said, despite the enthusiasm, oil is hitting key resistance levels as we look into the home stretch of trading this month.
The 100-month moving average (red line) has been a key level in recent years – helping to limit gains in 2018 – and it shows at $ 62.32.
Add to that the key trendline resistance going back to 2009, which is approaching around $ 60.56. These levels pose a major challenge to the resolve of buyers to extend the bullish momentum before the end of the month.
While the outlook for oil may be rather optimistic, even though supplies are expected to tighten in the coming months, there are technical challenges at the moment.
But while buyers can eventually get past that and the 200-month moving average (blue line), $ 100 may not seem like too much of a stretch in a commodity “supercyle”.