On Thursday (October 20th), the US Department of Energy expressed its desire to replenish strategic oil reserves at prices not exceeding $79. The purchasing plan aims to acquire 6 million barrels of crude oil, with deliveries scheduled for December of this year and January of next year. The purchase price for this plan is noticeably higher than the earlier target of $70 per barrel, although still significantly lower than the current near-$90 crude oil futures.
Of course, the recent increase in crude oil demand and rising prices, along with concerns among market investors about potential disruptions in Middle East oil production and transportation due to the Israel-Palestine conflict, have contributed to a tense situation. However, the current conflict has not directly involved major oil-producing countries, and the scope of the war remains limited to the main front lines between Israel and Hamas.
It is worth noting that the recent strong uptrend in crude oil prices is not being dragged down by the US 10-year Treasury yield surpassing 5%. Furthermore, the upcoming monetary policy of the Federal Reserve also brings some positives for the rise in oil prices. In recent speeches, several Fed officials, including Powell and Bowman, have sent dovish signals, downplaying the prospect of rate hikes, leading the market to anticipate another pause in rate hikes by the Fed in November and the maintenance of high interest rates for a longer period.
In addition, the latest data from the CME shows that traders increased their open positions in WTI crude oil futures by approximately 15,000 contracts on Thursday, ending the recent five-day decline. Moreover, trading volume has seen three consecutive days of growth, with an increase of over 51,000 contracts currently. With the increase in open positions and trading volume amid rising prices, it indicates the possibility of further short-term upward movement in oil prices.
Technical Analysis
US crude oil continues to follow the uptrend since June this year, trading above the 200-day MA. The MACD indicator has shown a bullish crossover signal, suggesting a potential breakthrough of the $90 mark in the short term, with support at $81 and resistance at $91.
（Source: Mitrade WebTrader, WTI 10/20 Daily Chart)