The price of West Texas Intermediate (WTI) oil, an international benchmark, has continued to range around the ~$65.00 price level for the past few weeks.
The price level is in fact a strong horizontal resistance level where the price has struggled to break through on several other occasions, including in April 2019, January 2020 and March 2021, as shown in the chart below.
Many analysts point to the fact that the context of the oil market is very different to previous years. As economies open, the demand for oil has increased, which has helped to fuel a huge rally higher, since the lows of the pandemic last year.
Source: Admirals MetaTrader 5, CRUDOIL, Weekly – Data range: from Aug 5, 2012, to May 11, 2021, performed on May 11, 2021, at 8:30 pm GMT. Please note: Past performance is not a reliable indicator of future results.
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The technical picture also shows a more positive outlook, as the previous interactions with the ~$65.00 price level resulted in a significant move lower – a move that has not happened yet.
If the price can break through this resistance level, then there could be a near 20% rally higher to the next level of resistance around the ~$77.00 price level, which is a multi-year high.
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