WTI consolidates gains, up almost 3%

Crude oil rose sharply on Tuesday and reached the highest level in two weeks slightly below $49.00. Near the end of the session, it was trading at $48.60, up 2.85% for the day. During the last seven days rallied 6.50%. 

A weak US dollar and the fact that more refineries and pipelines in the US resume working after Hurricane Harvey. The recovery of the refineries took place faster than initially estimated forcing crude oil shorts to unwind their positions.

Technical outlook 

“The daily chart shows that WTI recovered sharply from its 100 DMA, still below the 200 DMA, this last providing an important resistance in the 49.30 region. In the same chart, technical indicators turned north, but are still within neutral territory, suggesting that oil should extend beyond the mentioned MA to extend its rally”, said Valeria Bednarik, Chief Analyst at FXStreet.

According to her, in the 4 hours chart, WIT settled above its 100 and 200 SMAs, with the shortest still heading lower below the larger, “somehow indicating that the current recovery could be temporal, whilst technical indicators are pulling back from overbought level, which is not enough to confirm a downward move.”