Crude oil WTI bulls try to find a launchpad to challenge 2018 highs

• Crude oil WTI rebounds at $63.72 with buyers eying the high of the year and beyond.
• Crude oil WTI bears are looking towards the $62.30 level.

Crude oil futures are trading at around $64.91 slightly up on Good Friday as most market participants are on the Easter long weekend.

The main event of the week in the oil markethas been talks between Saudi Arabia and Russia about a 10 to 20-year alliance in order to support oil prices. Many analysts referred to it as an “unparalleled oil deal.”  

Earlier in the week, the key indicator for oil, the EIA Crude Oil Stockpile  report, showed a build of 1.643 million barrels against a draw of -0.287 million forecasted. On Tuesday the less popular data from the American Petroleum Institute (API) also showed an increase in the number of barrels to 5.321 million from previous readings. Usually, an increased number of oil barrels from the previous week or a build, is  considered as bearish as it might indicate that the oil supply is higher than the demand. On Thursday the US Baker Hughes Oil Rig decelerated to 798 from 804 last week. 

Crude oil WTI daily chart

The market closed the day pretty much unchanged on Thursday. The bears brought the market down to $63.81 and the bulls managed a v-shaped recovery creating essentially a doji bar on the daily chart and a small double bottom with the March 21 low. Bulls’ initial target is $65.50, followed by the $66 handle; further up, $66.66 is the high of 2018. If the bulls can’t break above $65.50 supply zone in the next sessions, the pullback down may continue and $63.81 swing low becomes the support; if this level gets successfully broken, the next scaling point is seen at $62.30 previous demand zone. The long term-trend on oil is bullish but market participants will need to decide what happens after the double top made on March, 26.