Oil returns to $75 ahead of next week’s eventful schedule

• Oil prices are tied for a third consecutive day of gains on Friday.
• Traders are buying crude again on fears the recession will ease.
• The US dollar index is trading at a pivotal level ahead of the weekend.

The price of oil is up more than 4% in a three-day winning streak after the commodity was crushed by recession fears earlier this week. Traders are buying the black gold again with an eventful calendar next week and some favorable headlines for crude oil prices, with Israel again giving the green light to talks with Hamas. Meanwhile, Yahoo! Finance reported that an Indian company has received a waiver from US authorities to buy crude oil from Venezuela.

The U.S. Dollar Index (DXY), which tracks the U.S. dollar’s performance against six major currencies, is playing with fire and could see its recovery efforts futile. The DXY attempted to close above a key level for the fourth day in a row and is again giving up on Friday. This could indicate a more substantial exit from the US dollar and lead to another leg lower for the Greenback against most of its major peers in the coming week.

At the time of writing, crude oil (WTI) is trading at $75.19 and Brent at $78.75.

Oil news and market developments: Headlines are rising

• Yahoo! Finance reports that India’s Reliance Industries has received approval from the US to resume oil transactions with Venezuela.
• Oil will have a very busy week ahead, with main risks from the monthly OPEC meeting and the International Energy Administration (IEA) report. China’s industrial production data for July will also move the needle on crude oil prices.
• The recent correction in oil prices could come as a welcome surprise to US consumers at the pump, and an increase in demand could be expected in the coming weeks, according to the Wall Street Journal.
• The weekly Baker Hughes US Oil Rig Count will be released at 17:00 GMT on Friday. The previous number was 482 and no forecast is available.

Technical Analysis of Oil: Pivot Point of Recovery

The price of oil is trying to continue its recovery, with a third consecutive day of gains. However, it could become difficult from here with a pivotal level of $75.27 making it difficult for the bulls to break through. A second rejection, right at the end of the week, could mean trouble ahead, while a break and close higher could point to another higher level at $77.70.

On the other hand, the first level that is imperative to regain control above is $75.27, which is in play as a pivotal level before retracing to the 200-day simple moving average (SMA) at 77.70 USD. The other two major moving averages are very close, with the 55-day SMA at $78.58 and the 100-day SMA at $79.88.

The Relative Strength Index (RSI) has bounced back a touch on the daily chart, meaning there is room for a lower trend again. Looking down, the first level to watch out for is $72.00. Once a new low for August is printed on the charts, another lower level would not rule out $68.00 or even $67.11, an 18-month low.

US WTI Crude Oil: Daily Chart