WTI bounces up to approach highs near $84.00

• WTI futures pare losses and return near multi-year highs at $83.95.
• Oil prices consolidate after a six-week rally.

Front-month WTI futures have bounced up at $82.50, regaining previous losses to return to levels near multi-year highs at $83.95. On a broader picture, however, crude prices remain within previous ranges, consolidating after a nine-week rally.

Oil’s rally stalls on renewed COVID-19 fears

Oil prices retreated earlier today as the German Chancellor, Angela Merkel, and Federal Reserve’s Chairman, Jerome Powell, warned about demand disruptions if COVID-19 infections reemerge. The surge of coronavirus cases registered in China and Russia has raised concerns that the pandemic might not be over yet.

Furthermore, the Baker Hughes report has shown the first decline in oil rigs in the last seven weeks. The amount of US rigs drilling for oil declined to 443 this week, from 445 on the previous one, while natural gas fell by one to 542, according to the report.

On Thursday, a report released by the National Oceanic And Atmospheric Administration revealed that the next winter is expected to be warmer than the average in the US, which added negative pressure to crude futures.

WTI prices consolidate below $84.00

Crude prices have remained trading rangebound between 80.75 and 83.90 for most of the week, consolidating after having surged more than 35% over the last two months. On the upside, a clear move above $83.95 might open the path towards the 90.00 psychological area.

On the downside, immediate support lies at intra-day level $82.50 and $81.50 (October 22 low) ahead of October 20 and 21lows at $80.80.

Technical levels to watch