WTI surges +2% to $ 72.40, fresh 11-week tops

• Tighter markets and higher price-forecasts drive oil prices through the roof.
• $ 73 back on sight, as technical set up points to further upside.

WTI (oil futures on NYMEX) opened the week with a bullish gap and extended Friday’s upbeat momentum, as the bulls cheered tightening oil markets and expectations of rising prices.

The US sanctions on Iran, targeting the OPEC’s No. 3 oil exporter’s oil sector, comes into effect from Nov. 4, are likely to cause supply disruptions. Also, the US crude stockpiles sit at 3-1/2-year lows, according to the latest EIA data.

In the wake of tightening oil supplies, commodity giants Trafigura and Mercuria forecasted that Brent could rise to $90 per barrel by Christmas and surpass $100 in early 2019, which further collaborated to the upsurge in the prices.

Meanwhile, the oil-price rally picked-up strength following the weekend’s OPEC+ meeting in Algeria, which saw the OPEC paying little heed to the US President Trump’s demand to lower prices.

WTI Technical Levels

Resistances: $ 72.50 (psychological level), $ 72.83 (mid-May tops), $ 73 (round number).

Supports: $ 71.50 (daily pivot), $ 70.73 (Sept 20 low), $ 70.32 (10-DMA).