WTI US crude oil sees Tuesday whip, hits $90 again

• WTI recovered to $90.00 in Tuesday trading after dipping to a session low of $87.73.
• Crude oil prices remain well-bid as supply constraint fears bolster barrel costs.
• Broad-market risk aversion preventing further climbs up the chart for WTI.

West Texas Intermediary (WTI) US crude oil prices have reclaimed the $90/bbl handle in Tuesday’s trading window after hitting a two-week low early in the day of $87.74.

US crude reserves are rapidly dwindling in the face of a global supply deficit of nearly 2 million bpd. The major crude reservoir at Cushing, Oklahoma has reached 14-year lows, and declining reserve supplies will provide further upside price pressures for WTI.

Cushing reserves have reversed rapidly; the facility hit a two-year reserve high in June of 43 million barrels and is now sitting just below 23 million barrels, its lowest stock supply since last July.

Despite broad-market risk aversion sending risk assets lower on the day, WTI US crude has caught a bump on the charts.

Despite ongoing supply constraints on the heels of Saudi Arabia and Russia’s 1.3 million bpd production cut extensions through the end of the year, upside pressure on oil prices could see a ceiling sooner than many analysts expect.

US crude production has been ramping up as of late, and despite a declining number of active oil rigs and wells, efficiency in the crude sector is steadily rising, and US oil production continues to creep higher.

US crude production in September is expected to hit production levels on par with 2019’s record-setting 13 million bpd.

WTI technical outlook

US crude oil is up over 2.5% from Tuesday’s lows, remounting the $90/bbl handle and poised for further gains as long as crude bulls can keep the bid line over the 200-hour Simple Moving Average (SMA) currently priced in at $89.90.

On the daily candlesticks, crude prices remain firmly on the topside, with technical indicators breaking down as they remain pinned firmly in overbought territory. The Relative Strength Index (RSI) has been at or near overbought territory for nearly a month straight on a 14-day rolling basis.

The 200-day SMA remains well below current price action, turning mildly bullish from $77.00, and the 34-day Exponential Moving Average (EMA) is providing technical support from just beneath the $86.00 handle.

WTI 4-hour chart

WTI technical levels