West Texas Intermediate’s push toward $100 a barrel for the first time since September is facing resistance from a Fibonacci level at $98, according to technical analysis by Petromatrix GmbH.
April WTI, which will become the front-month future tomorrow after contracts for delivery in March expire, was at $97.46 a barrel at 11:20 a.m. London time. WTI faces a barrier at $98, a price equivalent to 61.8 percent of the difference between the U.S. benchmark’s lowest and highest points last year, the researcher said in an e-mailed report today.
“After proving that it can hold the support of $95, WTI still needs to prove that it can break the resistance at $98,” said Olivier Jakob, managing director at the Zug, Switzerland- based consultant.
WTI repeatedly encountered resistance at $98 in an earlier rally from July to September last year, Petromatrix’s Jakob said. The grade will meet further barriers at $98.30, and then $99, before it can gather enough momentum to reach $100, a level last surpassed on Sept. 14, he said.
The Fibonacci sequence of numbers is used by traders to predict areas of support and resistance as markets repeat earlier movements.
Barclays Plc said in a report yesterday that WTI has shown signs of faltering, and that a drop to $95.50 a barrel could trigger losses to as low as $92.35. The level of $95.50 corresponds to a “double-top” formed after futures halted advanced to near $98 on Jan. 31 and Feb. 13.
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