On Monday, West Texas Intermediate (WTI) oil climbed above the critical 70 USD, while the European Brent benchmark advanced toward 74 USD. Oil continued to rise amid Hurricane Ida’s impact on US output. About three-quarters - or about 1.4 million barrels per day - of the offshore oil production in the Gulf of Mexico has remained halted since late August.

“Hurricane Ida was unique in having a net bullish impact on US and global oil balances - with the impact on demand smaller than on production,” Goldman Sachs analysts said in a note from last Friday.

We could say that USD had affected this changes in oil price, but that is not quite correct. However, the EURUSD pair managed to get back above its 50-day average at 1.18, and if it produces a rally, oil might be further supported. 

The WTI is now near 69.60 USD and it managed to push above the 50-day moving average, confirming the bullish bias and setting the short-term outlook to bullish. Additionally, staying above the psychological level of 70 USD is also supporting the bullish case. Lastly, the price managed to rise strongly above the bearish trend line, which had been limiting oil since July, ending the medium-term downtrend. 

Oil is now trying to close above the resistance of 70.55 USD, possibly leading to another leg higher, targeting the 74 USD zone.  Alternatively, there are several strong support zones - the psychological barrier at 70 USD, the 50-day average at 69.60 USD, and the broken trend line at 69 USD.