Oil flat with plenty moving parts on Middle East

• WTI Oil tests the double top which could mean more upside. 
• Oil traders are sending crude higher with EIA reporting OPEC production cuts are being respected. 
• The US Dollar Index is stronger ahead of US CPI numbers. 

Oil prices are jumping higher with a six-day consecutive winning streak which looks to be entering a crucial phase this Tuesday. The jump in Oil comes with additional US sanctions shelving Russian-friendly Oil tankers which are floating around with empty cargo. An extra bullish element for Oil comes from the International Energy Agency (IEA) which reports that OPEC+ production cuts are being well respected. 

Meanwhile, the US Dollar Index (DXY) is in the green, ahead of the always important US Consumer Price Index (CPI). Last week the US administration revised the calculation method for inflation to better represent real life situations. It resulted in an even lower-than-expected inflation print for December and could mean more disinflation ahead for this Tuesday’s number. Given USD’s negative correlation with Oil, this in turn could benefit Black Gold. 

Crude Oil (WTI) trades at $76.88 per barrel, and Brent Oil trades at $81.96 per barrel at the time of writing. 

Oil news and market movers: OPEC comments firing up markets

• OPEC will stay proactive and united, the Secretary General of the OPEC group Haitham Al Ghais  said this morning at the World Governments’ Summit. 
• Fatih Birol, Executive Director of the International Energy Agency (IEA) said that OPEC+ is showing largely good discipline in its supply cuts. Further, the IEA sees global demand growing by 1.2 to 1.3 million barrels per day in 2024.
• Saudi Aramco is still looking into adding supply output and said it is ready to raise its capacity should the government ask for it. 
• The US administration has sanctioned around 25 tankers (out of the 50) from carrying Russian Oil. These are currently either afloat at sea without any cargo or are harboured without any travel papers or plans being admitted at the moment. 

Oil Technical Analysis: “Crucial” point

Oil prices have staged a very solid rally these past six days with a nice consecutive winning streak. The end of the line could be near with prices currently banging on the $77 marker which falls in line with both a descending trend line, the 100-day and the 200-day Simple Moving Average just a few cents apart from each other. Should more positive, supportive or outright bullish news for Oil emerge, a quick sprint to $80 could be underway. 

As mentioned above, $80 is the first level to have a look at on the upside. Should the Relative Strength Index not head into being overbought too quickly, look for $84 and $88 as next targets to the upside. The ultimate target in this area would be $92.66, with the tops from November 2022 coming into play. 

On the downside, support from the 55-day SMA at 73.52 should goto work before the green ascending trend line near $72.10 gets tested. If that trend line snaps, look for the purple line near $67.11 to catch any falling knives. Seeing the triple bottom from June/July 2023, that level should be strong enough to support. 

US WTI Crude Oil: Daily Chart