Crude oil turned really bearish during August, as OPEC+ increased production quotas, while fears of the upcoming restrictions due, to the Delta variant of the coronavirus also weighed on oil prices. US WTI Crude fell more than 12 cents, but the 200 SMA (purple) held as support. US oil bounced off that moving average as soon as the market opened on Monday morning, and the first two days of this week were the strongest, as far back as the chart shows.

The USD turned weaker this week, helping this strong bounce. The situation in China seems a bit better now, helping to ease worries about a prolonged hit to consumption activity and oil demand. As such, the broader outlook for oil going into next year remains relatively unchanged as the market is likely to remain tight and that is supportive of higher prices in general.

Crude Oil Live Chart

The overall sentiment on the pandemic and the Delta variant is still likely to keep oil gains limited in the short-term but if the market starts to sense a convincing turn in the battle against the virus, there’s room for oil to rally much further from these levels. But for now, WTI Crude Oil has stalled right at the 20 and 100 SMAs on the daily chart and the US durable goods orders report didn’t help much, as they came in above expectations.

US July 2021 durable goods orders data