- The WTI corrects three-month highs in Europe.
- Hopes of OPEC + production reductions reinforce the recent rally.
- Bullish API data supports EIA crude stock data.
The WTI (July futures on Nymex) is out of the three-month highs of the European session, consolidating the rise around 37.50 levels, having failed to keep the rally above the bar of 38.
The bulls appear exhausted on the third day of earnings pending the latest weekly US crude inventory data, which is due to be released by the US Energy Information Administration (EIA) later today at 2:30 p.m. GMT for further commercial momentum.
The rise in black gold is mainly fueled by the unexpected drawdown of API crude supplies, hopes for an expansion of OPEC + production and a story about the global economic recovery. bullish sentiment around oil.
Jim Burkhard, vice president and head of oil markets at IHS Markit, said on Wednesday: “The rapid recovery in demand for Chinese oil, 90% from pre-COVID levels in late April and rising, is a sign of welcome to the global economy. ”
In addition, with Brent oil regaining the critical barrier 40, sentiment in the oil market has gained new momentum. Meanwhile, the general weakness of the US dollar, against a backdrop of renewed equity risks, makes dollar-sensitive oil cheaper for foreign buyers.
Oil traders are now awaiting the OPEC + production cut decision expected later this week for the next price direction.
WTI technical levels to watch
“Oil prices are rising to close the gap between the March 06 low of $ 41.22 and the March 11 high of $ 36.64. However, RSI’s overbought conditions raise doubts about the further rise in listing and, therefore, any decline below $ 36.40, including a 100-day SMA, could drag it towards a line of Short term support up to $ 35.00 now. In a case where the WTI falls below $ 35.00, the April high of $ 32.20 could attract sellers, “said FXStreet analyst Anil Panchal.