The WTI crude oil prices surged for a consecutive third day to trade at $54.33. In this update, you will find three major reasons behind crude oil’s bullish trend.
1) The bullish trend was triggered after a report from the US Energy Information Administration (EIA) recorded a dip in Saudi crude supply to the United States. As per the report, the US imports from Saudi Arabia plunged dramatically to 442K barrels per day (bpd), For your info, this is the second lowest level since 2010.
2) EIA reported a build of 0.9M for the previous week, which is far less than 8.0M previously. This indicates an increase in crude oil demand. As we know, commodities are denominated in terms of the US dollar which is why dollar shares a negative correlation with the commodities. So, weakening dollar also attracted few investors for crude oil yesterday.
3) Thirdly, the technical side also played a big role. As we can see on the chart, crude oil managed to violate a sideways trading range of $53.90 – $51.30 to place a fresh high near $54.90.
Since crude oil is already trading out of this range, it’s likely to define a fresh trading range for the rest of the week. The new trading range is likely to be $53.86 to $55. Crude may find support near $53 in case of bearish breakout while resistance can be seen at $55.80 on the bullish breakout.