Crude Oil – Saudi Production Cuts Spark Rally

USOIL- Hourly

USOIL-

It’s been an impressive start to the year for Crude Oil prices so far, with prices steadily rising to over $50 per barrel and returning to pre-pandemic levels. It would seem many underestimated such a speedy recovery.

Still, with the general uptick in global commodity prices and a pledge from Saudi Arabia to cut production heavily over the next year, Crude Oil has benefited significantly, and today we’re looking more at short-term levels using the hourly chart above.

First, we have a validated bullish trendline that emerged on January 5th and continues to provide adequate price support for Crude Oil. This trend’s strength appears fairly robust following a barrage of tests over the most recent trading sessions.

In terms of potential targets, the chart shows some DiNapoli levels T1 & T2 calculated from the following price points (49.46 / 51.26 / 50.42) and (50.42 / 52.72 / 51.49). Since the first price target reached on the 8th, the focus now will be T2, which is $53.79 a barrel.

Perhaps we may see a further re-test of the current trendline as support before advancing to the higher levels. However, should this region succumb to downward selling pressure, the areas of $51.49 and $49.80 could become alternative levels to consider for levels of demand/support.

Note: Click on charts to enlarge.

Sources: Go Markets, Meta Trader 5, TradingView, Bloomberg