Oil launched a new week lower. Prices dropped following news of numerous flight cancellations in the United States during Christmas weekend due to Covid infections among airline crews. However, downbeat moods did not last for long and oil started to recover in the afternoon. A strong move higher in risk assets occurred with oil recovering losses and advancing over 2% on the day. Crude may also become slightly more active in the evening today as the API report on inventories will be released.
Taking a look at technical situation on OIL.WTI, we can see that price broke above the downward trendline drawn through recent local highs. After retesting the trendline as a support, price rallied and reached the highest level in a month. Area above $77 handle should be watched closely as it is marked with the upper limit of the upward channel and the range of the previous upward impulse. The next resistance to watch can be found at the $79.15 swing level. While API report today and DOE report tomorrow may provide some short-term volatility on oil market, it will be OPEC+ meeting at the beginning of January that will have a more lasting impact.
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Source: xStation5
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