WTI OIL extends rally on repeated inventories draw; signs of tightening
WTI oil hit new high at $51.62 on Friday (the highest since 02 Oct) as bulls regained control after the price dipped to $50.14 low on Thursday.
Fresh support came from EIA crude stocks report which showed the third consecutive decline in crude inventories which fell by 2.75 million barrels in the week ended 6 Oct.
In addition, the oil prices were driven higher by rising bullish sentiment on global signs that the oil market is tightening.
Eventual break above $51.40 pivot (Fibo 61.8% of $52.84/$49.09 downleg) is bullish signal which requires close above for confirmation.
Fresh bulls eye target at $51.96 (Fibo 76.4%) and could extend towards key barrier at $52.84 (28 Sep peak) on further bullish acceleration.
Overbought slow stochastic and still negative 14d momentum require caution of possible stall.
Top of thick 4-hr cloud marks solid support at $50.97, along with broken 20SMA ($50.80) which should keep the downside protected, while extension below 10SMA / Tenkan-sen ($50.43/36) would weaken near-term tone and shift bias lower.
Res: 51.62; 51.96; 52.41; 52.84
Sup: 51.40; 50.97; 50.80; 50.36