WTI consolidates the rally above $22 ahead of API
|- WTI bulls take a breather from the multi-week highs.
- Easing lockdowns fuels hopes for oil demand pick up.
- Major banks raise their oil-price forecast, eyes on API data.
Having reached the highest level in three weeks at $22.77 in early Europe, WTI (June futures on Nymex) eased slightly in the EU session, now consolidating the upsurge above the 22 handle.
The US oil, currently, rallies over 10% to trade 22.37, extending Monday’s upbeat momentum. The staggering recovery rally in the black gold can be mainly associated with the revival of the hopes of a pick-up in oil demand, as most major global economies veer towards easing of the lockdown measures and travel restrictions.
Additionally, news that major global banking giants have raised their oil-price forecasts, offered further zest to the bulls. Goldman Sachs upped their WTI forecast to $51.38/ barrel for 2021 while UBS ramped up their Brent oil price estimates.
However, the bulls seem to have turned cautious, as the market mood turned tepid on the German court ruling on the European Central Bank (ECB) QE case. Also, traders weigh in the renewed US-China tensions ahead of the US ISM Non-Manufacturing PMI and American Petroleum Institute’s (API) weekly Crude Stocks data.
WTI technical levels to watch
Technically, the buyers are poised to test the 50-DMA at 24.85 on a sustained breakthrough the 23 handle. To the south, the 20 level (daily pivot point/ 5-DMA) is the level to beat for the bears. All in all, the upside appears more compelling amid optimism over the lockdowns easing.
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