- US WTI crude oil sets a new ten-month high on Tuesday.
- US shale production will decline more than expected.
- Oil is trading firmly higher, targeting $100.
barrel of crude oil West Texas Intermediate (WTI) It briefly surpassed the $93.00/bbl level in trading on Tuesday. Oil continues to trade higher, as concerns about tight supply send investors running and drive up the price of a barrel of crude oil.
US shale oil production will continue to slow and oil markets rise sharply
The Energy Information Agency (EIA) warns that US shale production will continue to decline in October. The EIA report on drilling productivity forecasts shale production of 9.393 million barrels per day, the lowest level since May of this year.
Crude prices are facing enormous pressure since Saudi Arabia and Russia announced the extension of their 1.3 million bpd production cuts until the end of the year. WTI crude oil prices have risen 15% in just four weeks as traders fear a breakdown in global supply.
The global oil supply chain is expected to post a shortfall of 2 million bpd in the first quarter of 2024. With such a large shortfall, global oil reserves are expected to shrink to nothing unless they are put in place. new crude oil production projects are launched and capacity is restored.
WTI Technical Outlook
WTI has closed in the green for ten of the last twelve consecutive weeks, and is hitting ten-month highs as crude oil pushes higher. US oil briefly reached levels above $92/bbl, before settling back below $91.50/bbl.
On the daily candlesticks, crude oil has plenty of room as prices clearly broke the 200-day SMA in July, which currently sits near $77/bbl.
If it continues to rise, oil prices will test $92.50, a level where there have been significant rejections in the past.
On the downside, support comes from the 34-day EMA near $84/bbl, with the short-term bottom at the latest low of $78/bbl in mid-August.
WTI daily chart
WTI technical levels
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
