Crude oil moves up to test its 100 day moving average
The price of WTI crude oil futures settled at $73.86. That’s up $2.06 or 2.87%. The gain equaled the gain from July 5 which is the largest gain since June 15. The low price reached $71.19. The high price was at $73.91. The lower US dollar has contributed to the rise.
Technically, the move to the upside has the price testing it’s 100-day moving average currently at $73.86. The last time the price tested that moving average was back on May 1 and April 28. The price closed just above the moving average on April 28 but rotated lower the next day.
Next week, traders will need to decide whether to break above that key 100 day moving average moving average and look toward the 200-day moving average up at $77.47 (the last time the price tested that moving average back on April 13 when sellers leaned), OR use the moving average level to push price back to the downside?
For now, the momentum to the upside has reached its target. The buyers and sellers will now battle it out for control.
Fundamentally, Reuters reports that Russia still plans to cut oil exports in August due to domestic gasoline demand, but it’s unlikely to reduce output. Also, the Baker Hughes US Rig Count for the week ending July 7th reported oil rigs were down by 5 at 540, while natural gas rigs saw the biggest increase in six years, up 11 to 135, bringing the total rig count to 680.
For the trading week, the price of crude oil rose 4.53%. That’s the largest increase since the week of April 3.