Oil continues to be the breakout story of 2019 so far

Technical Analysis

Author: Justin Low | oil

Oil is up by nearly 45% since the turn of the year

WTI 22-04
ForexLive
And price is trading up by more than 2% today, breaking above $65 for the first time since November last year. The move higher comes after a report saying that the US looks set announce a complete cutoff to Iran oil exports later today.

Technically, there is some resistance seen around $65.75 before we approach further swing region resistance around $67.75 - $68.00. However, given recent developments, it's hard to argue against a further extension to the upside in oil at this point as the fundamentals continue to back the technical breaks since the start of the year.

Price battled through the 100-day MA (red line) before moving past the $60 barrier and then sailing through the 200-day MA (blue line) to establish a more bullish bias currently. Although an OPEC+ output cut extension is not a given, the situation in Venezuela, Libya and Iran are so far doing enough to bolster oil prices this year.

The only enigma in the OPEC+ deal is Russia as they still continue to only have one foot in the circle, with the other foot out of it as they want to keep up market share in the battle against US producers. But there is no doubt that Saudi Arabia are likely to stay committed to extend cuts beyond the summer and if they can get Russia on board, it doesn't look like the oil train is going to stop any time soon.

As a reminder, the OPEC+ JMMC meeting will take place in the middle of the next month so that will be a key risk event to watch over the next few weeks.

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