Oil prices closed up nearly 2% on Friday, after reaching a peak of 3.4%, and corrected by 0.2% on Monday. WTI touched a high of $80.3, a level last seen in November 2023. If it consolidates above $79, it would mean breaking through a long-term level of resistance, a position that bulls had not been able to breach in the past four months.
FxPro senior analyst Alex Kuptsikevich noted: Friday's rise widened the gap between the dollar and the 200-day moving average, which should also be seen as a manifestation of bullish strength. Technically speaking, there is no significant obstacle for oil prices to rebound to the $89-$92 region.
Of course, this bullish outlook only holds if, in the next few days, oil prices prove capable of rising from current levels, a situation that has not occurred since November last year.
OPEC+ has publicly supported expanding and strengthening (Russia's) oil production and export quotas. The recovery of production will be indefinitely postponed "according to market conditions".
This could be a golden opportunity for the United States to regain market share in oil, but it is not in a hurry to do so. Data from Friday showed that the number of oil drillers rose to 506, the highest level since September last year, but only an increase of 9 rigs from the low point of 497, which is more stagnation than growth. Just one year ago, in January 2023, there were 623 oil wells and 152 gas wells operating, and now there are only 123.
Perhaps the rise in oil prices will encourage those producers who are still cautious about the green agenda and sudden price drops. Simply put, so far, the U.S. has been very sluggish in showing support for the bearish side.
