- WTI Crude’s monthly chart highlights bullish run.
- Oil owes its rallying prices to OPEC+ agreement to cut production and the lifting of restrictions put in place due to coronavirus.
- WTI Crude will likely end the month with a 76% rally.
May has been an interesting month for WTI Crude as oil prices remained largely bullish thanks to the industry’s recovery after a historically low performance in April. Oil prices rallied to 2-5-month highs earlier this week before losing some of the gains due to increased tension between China and the U.S. Nevertheless, it seems crude prices will still achieve their biggest monthly gains in history.
Crude prices rallied to around $34.18 on Friday morning before pulling back slightly for a weak bearish to neutral performance. It is expected to hit key target points at $33.26, $34.18, and $34.59 if it trades long above $33.06. However, it will also likely test support at $32.46, $31.38, and $29.91 if it trades short below $32.66.
Analysts predict that WTI Crude will register a 76% gain for May, which will officially make it the biggest monthly gain in the history of crude oil prices. The impressive rally was likely caused by different factors, including the deal that OPEC+ members reached to slash the daily oil production by 9.7 million barrels. This also allowed for a ceasefire between Saudi Arabia and Russia.
The two countries are among the top oil producers in the world, but they were locked in an oil price war at around the same time that the coronavirus caused demand for oil to plummet. This escalated the oil price crash in March and April. Slashing oil output allowed for the stabilization of oil prices.
Another major factor that contributed to the crude oil rally in this the eased lockdown and quarantine measures that were instituted to prevent the spread of the coronavirus. Eased measures facilitated an improvement in the demand for crude oil and the impressive rally.
Crude oil prices experienced one of the biggest declines in history in March and April, with prices even reaching negative territory. However, government measures and measures implemented by key players in the oil industry facilitated the rapid recovery.