WTI advances sharply above $82.00 on STEO report showing an excess supply in early 2022

• WTI rallies during the New York session bounced off the lows at $80.900, gains $1.50.
• EIA cut the forecast for oil demand for 2022.
• WTI Technical outlook: Bullish flag in the 4-hour chart, targets $86.00

Western Texas Intermediate, also known as WTI, advances in the New York session, up almost 2%, trading at $82.93 per barrel at the time of writing. During the day, the black gold retreated under the $81.00 psychological figure, finding support at the 1-hour 50-simple moving average at $80.99, which capped the downward pressure on the US crude oil benchmark. Furthermore, recovered some early losses on positive news of the EIA cutting the forecast for oil demand for 2022.

According to Bloomberg, the Short Term Energy Outlook (STEO) predicted that the market would have an excess supply early in the following year and reported that prices would fall in December from current levels. Market participants were impatiently waiting for the report, as sources said the Biden administration was considering tapering the US Specific Petroleum Reserves (SPR).

Crude oil prices have risen as vaccination rates increased and COVID-19 cases dropped across the globe. That easied lockdowns, in turn, increased mobility of people, consequently spurring a higher oil demand. According to sources cited by Bloomberg, demand “is going to be reasonably tight” for the next 12 months, and a price spike to $100 a barrel is on the cards.

The White House has exerted pressure on OPEC and its allies to increase the crude oil output, but the cartel stayed put, sticking to its 400K crude oil barrel target per day.

At 21:30 GMT, the American Petroleum Institute (API) will reveal its Weekly Crude Oul Stock for the week ending on November 8. The previous reading was 3.594M. A report higher than the abovementioned could be bearish for WTI, otherwise could boost the WTI prospect for higher prices.

WTI Price Forecast: Bullish flag in the 4-hour chart, targets $86.00

The 4-hour chart depicts that WTI is breaking the top of a bullish flag, that according to technical analysis measures, could propel WTI’s towards $86.00 per barrel, but it needs to close above it. In that outcome, the first resistance would be the November 1 high at $83.97. A breach of the latter would expose the 2021 year-to-date high at $85.00 and then the bullish-flag target.