Crude oil prices have rallied over 12 percent this month so far, aiming for the best month since January 2022. On the daily chart, WTI broke above the 200-day moving average, a level not seen since August 2022. This recent surge has been bolstered by a near-term rising trendline from the end of June.
WTI crude oil prices rose about 2.8 percent on Monday, marking the strongest 24-hour period since June 13th. If this push is sustained, it would be the best 20-day period for WTI since January 2022, which was 18 months ago.
The technical landscape is shaping up favorably, with the break above the 200-day Moving Average indicating the potential for a meaningful turnaround for oil. However, for long-term upside progress, the 81.44 – 83.48 resistance zone is of utmost importance. If WTI fails to clear this zone, it could maintain a range-bound bias, with support around 63.60 – 65.72.
On the sentiment front, the IG Client Sentiment (IGCS) gauge shows that about 50.07% of retail traders are net-long crude oil. IGCS typically tends to function as a contrarian indicator. The recent increase in downside exposure suggests that positioning is becoming more bearish, which could underscore an upside technical bias for oil.
In summary, crude oil prices are experiencing a strong rally this month, with the potential for the best performance since January 2022. The technical indicators are favorable, especially with the break above the 200-day Moving Average, but the resistance zone at 81.44 – 83.48 will be crucial for sustained upside momentum. Retail traders’ positioning is turning bearish, further supporting the potential for upward movement in oil prices.
