Oil Technical Analysis: US strategic reserve build-up economics
Oil prices are set to head higher as the game of chicken between the US and OPEC appears to be falling in favor of the Oil cartel. The US is unable to oversupply markets with oil as it is unable to match the production cuts from Saudi Arabia and Russia. Being forced to restock its strategic reserves, the US is paying a very expensive price in its economic war with Russia and OPEC, while it creates a second-round effect in US inflation with prices at the gas pumps remaining fragile for upswings.
Oil bulls will see $86 appearing as the next cap. Further up, $86.90 follows suit before targeting $89.64 and $93.98 as top levels.
On the downside, both $80.00 and $80.60 should be acting as support with the 200-day Simple Moving Average (SMA) as the level to catch any falling knives near $78.55. The 100-day and the 55-day SMA’s are near $75.64 and $77.15, respectively. Add the pivotal level near $75.27, and it looks like the downside is very limited and well-equipped to resist the selling pressure
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