WTI breaks above $77.00 and forms a bullish engulfing candle as bulls eye the 20 DMA around $78.40

• WTI will end the week with losses of more than 2%.
• Factors such as strong US jobs data and the EU embargo on Russian oil-related products support WTI.
• WTI Technical Analysis: In the short term it leans to the upside and could test $80.00.

The benchmark US crude oil, known as Western Texas Intermediate (WTI)., rose on the release of a strong US jobs report, though prices remain headed for a weekly loss. At the time of writing these lines, WTI is trading at $77.85 per barrel.

WTI extended its gains on Friday on a surprising report from the US Department of Labor (DoL) which showed that the economy created 517,000 jobs in January, bettering the 200,000 expected. As a result, the Unemployment Rate dropped from 3.5% to 3.4%, and the previous month’s figures were revised upwards.

Meanwhile, the European oil embargo on Russian refined products, due to start on February 5, is in the crosshairs of oil operators. Russian authorities commented that the EU ban could lead to further imbalance in world energy markets.

Meanwhile, according to ANZ analysts, China’s reopening has seen a sharp increase in traffic in its 15 largest cities following the lunar new year holiday.

That being said, WTI could continue to pare some of its weekly losses as investors keep an eye on the 20-day EMA at $78.47. Once broken, it could open the door to new uploads.

WTI Technical Analysis

The WTI daily chart shows oil forming a bullish engulfing candlestick pattern after rebounding from three-week lows. While the two candlestick pattern is bullish, WTI has yet to break through essential bullish resistance levels. The first resistance for WTI would be the 20-day EMA at $78.42, followed by the 50-day EMA at $79.19, which, once broken, could pave the way towards $80.00 per barrel.