Crude Oil jumps above $72 as China issues cash injection, UN assembles

• Crude Oil pops and tests above key level of $72 after China issues chunky financial injection. 
• Florida braces for potential Tropical Cyclone Nine. 
• The US Dollar Index steadies despite a surge in US yields. 

Crude Oil pops higher on Tuesday after the Chinese government launched a 500 billion Yuan (CNY) stimulus plan to reboot its economy. This liquidity injection plan should boost Chinese demand again for Crude Oil. Meanwhile, the geopolitical front is supporting a higher Crude Oil price even with the United Nations (UN) having an emergency assembly later this Tuesday after the intense strikes in Lebanon by Israel over the past few days. 

The US Dollar Index (DXY), which tracks the performance of the Greenback against six other currencies, trades sideways even though the uprising in yields, with, for example, the US 10-year Treasury at a fresh September high near 3.79%. The DXY is stuck again in the tight range where it was for most of September and looks unable to move away from it. 

At the time of writing, Crude Oil (WTI) trades at $71.94 and Brent Crude at $74.90.

Oil news and market movers: A full house

• Bloomberg reports that European refiners are forced to tap into shale Oil in order to replace the missing barrels from Libya. 
• Meanwhile, in the US, Florida braces for Tropical Cyclone Nine, set to hit Florida by Wednesday. Reuters reports that Shell and Chevron have evacuated non-essential personnel from its US Mexican Gulf rigs. 
• As usual, the American Petroleum Institute is due to release its weekly Crude stockpile change on Tuesday. No forecast is available for the week of September 20, while the previous release was a build of 1.96 million barrels. 

Oil Technical Analysis: It all comes together at once

Crude Oil is not enjoying one but three catalysts, all taking place simultaneously, which are driving Crude Oil prices above the $71.46 (the February 5 low) key level. With the geopolitical, a possible supply outage, and demand resurging from China, a broader rally could be playing out here. It would not come as a surprise that Crude Oil would hit $75 by the end of this week if the three fundamental catalysts remain in focus. 

If the positive momentum continues, a return to $75.27 (the January 12 high) could play out with this trifecta of bullish elements. Along the way towards that level, the 55-day Simple Moving Average (SMA) at $74.31 could ease the rally a bit. Once above $75.27, the first resistance to follow is $76.45, with the 100-day SMA in play. 

On the downside a reshuffle of supports should take place. First down now is $71.46, which should now act as support instead of resistance. In case that level does not hold, $67.11, a triple bottom in the summer of 2023, should support any downturns.  Further down, the next level in line is $64.38, the low from March and May 2023. 

US WTI Crude Oil: Daily Chart