Oil on the climb again as WTI nears 63.00/barrel
|- WTI, Brent climbing in risk-on markets.
- EIA supply contraction beginning to have an effect.
Crude has shaken off the recent downturn and has pushed up amid newfound risk appetite, with WTI trading just above 62.50.
The recent contraction in US oil inventories reported this week has begun to take effect, and coupled with the US Dollar's decline in the face of retreating bond yields, is sending oil back up the charts. Oil has erased the recent decline priced in from Dollar bidding and is looking for more heading through Asia markets. U.S. crude inventories unexpectedly fell 1.6 million barrels last week as net imports dropped to a record low and exports surged, while inventories declined further at the key storage hub in Cushing, Oklahoma, according to data from the Energy Information Administration (EIA).
American oversupply has been weighing on the commodity lately, but the EIA stock contraction has cooled fears of the supply glut for now, as OPEC's attempts to constrain supply seem to have had at least a mild effect in the face of slowly rising demand for crude.
Crude Oil Technicals
Both WTI and Brent are approaching the 50.0 Fibo retracement level following the steep decline that took WTI off 66.63 and Brent down from 71.26; further gains will have to break resistance at 63.06 for WTI and 66.53 for Brent, while support for the fossil commodity is priced in for WTI and Brent at 62.00 and 65.00 respectively.
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