WTI expected to close a winning week

WTI crude rose by over 0.70% on Friday, reaching $88.00. However, the daily chart shows exhaustion signals, suggesting tighter supply is a tailwind for oil prices. Global weakening demand may cap gains. The West Texas Intermediate advanced near $88.00 and settled below $87.00, still poised for a 2% weekly gain.

Overbought conditions suggest a downward technical correction. On the upside, Saudi Arabia and Russia will extend voluntary supply cuts for the rest of the year, which boosted oil prices. However, soft economic data from China and the Euro area and lower demand from the US could limit WTI’s upside.

A stronger USD and rising oil output from Iran and Venezuela may also add selling pressure. WTI crude shows bullish exhaustion, leading to a neutral to bullish technical outlook, suggesting a potential retracement to consolidate gains.