Oil contests key technical levels in upside push to start the new week

Technical Analysis

Author: Justin Low | oil

Oil in search of a breakout?

WTI
Well, buyers are certainly not shying away from attempting that with the high today hitting $70.46 as they are hoping to retest the month's high @ $70.61 with daily resistance still looming around $70.18 and keeping gains in-check.

The fundamental landscape for oil hasn't changed and as mentioned last week, while bullish considerations are still part of the broader picture for oil, short-term sentiment is tied to delta variant risks and other more pertinent headlines.

The former is starting to abate as countries look to shift the mentality from pandemic to endemic but it will be a slow and gradual pick up in global sentiment.

In any case, the technical picture is more interesting for oil now as it looks to try and contest a firm daily break above $70 and also trendline resistance stretching back to July.

If those levels give way, there is a good opportunity for oil to push gains back towards the 30 July high above $74, especially with winter looming just around the corner - bolstering demand conditions for fossil fuels in general.

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