WTI bulls ignore downbeat comments from Russia’s Novak, eye $46.00
|- WTI wavers near the upper end of one-week-old bullish flag.
- Russian Energy Minister Alexander Novak hopes total oil output increase by OPEC+ will reach 2 million bpd by April.
- OPEC+ agreed to for 500,000 barrels per day (bpd) output increase to 7.2 million bpd from January 2021.
- Risk-on mood, US dollar weakness favor the commodities, US employment data awaited.
WTI eases to $45.73 during the final trades of Thursday’s settlement, early-Friday for Asia. In doing so, the black gold remains positive on a daily basis while taking rounds to the November month’s high, also the highest since March.
The hopes that the coronavirus (COVID-19) vaccine will be rolled out soon, coupled with the expectations of US covid stimulus, weigh on the US dollar index (DXY) towards revisiting the April 2018 lows. The greenback weakness helps commodities and oil is no exception as increased market optimism also favors higher demand in near future.
While cheering the risk-on mood, the energy traders seem to pay a little heed to the OPEC+ decision of scaling back the previous production cut rules. Additionally, recently downbeat comments from the Russian Energy Minister Novak, suggesting a heavy increase in the output also got a little fanfare.
Wall Street benchmark refreshed record high, before closing Thursday’s trading with mixed gains, whereas the US 10-year Treasury yields ease amid fears of a further delay in the US stimulus as Republican leader Mitch McConnell recently turned down the bipartisan proposal of $908 billion stimulus.
Moving on, the US employment data for November will be the key, especially for the US dollar. Though, qualitative catalysts are in a much stronger shape to affect the market moves and hence should be watched carefully.
Technical analysis
August month’s high near $43.85 offers immediate support with a sustained break above $45.50 likely confirming the bullish flag on the four-hour chart.
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