WTI crude oil seesaws near seven-year high above $77.00 on cautious optimism
|- WTI consolidates the heaviest daily jump in three weeks around multi-day top.
- US President Biden’s readiness to trim stimulus top-line underpin recent risk-on mood.
- OPEC+ verdict, firmer US Factory Orders favor bulls amid fears from China, Fed tapering.
- US PMIs, API inventories will decorate calendar, risk catalysts are the key for fresh impulse.
Having jumped to the fresh high since November 2014, WTI bulls take a breather around $77.40 amid Tuesday’s Asian session.
The energy benchmark previously benefited from Monday’s decision by the Organization of the Petroleum Exporting Countries, Russia and their allies, known as OPEC+. The oil cartel reconfirmed the previously agreed deal under which 400,000 barrels per day (BPD) would be added in November, per Reuters.
Reuters also adds, “An OPEC+ source had told Reuters shortly before Monday's ministerial talks that the group had faced pressure to ramp up production faster, but added: ‘We are scared of the fourth wave of corona; no one wants to make any big moves.’”
It’s worth noting that the improvement in the market sentiment also helps the oil benchmark amid a quiet session.
The risk appetite improved after US President Joe Biden backed the need to trim the top line of the social safety net package to somewhere between $1.9 trillion and $2.2 trillion, according to two sources familiar with the call, said CNN.
Also, an absence of negative headlines from China, amid off in Beijing, helps the black gold to keep the latest recovery moves.
Amid these plays, S&P 500 Futures print mild gains despite a downbeat Wall Street close. Further, the US 10-year Treasury yields remain firmer around 1.49% by the press time.
Given the absence of China and mixed concerns over demand, considering the OPEC+ verdict, oil prices may wait for the US PMIs for September for fresh moves. Also important is the weekly inventory data from the industry source, namely the American Petroleum Institute (API).
Technical analysis
A clear upside break of the late 2018 peak surrounding $76.80 enables the WTI crude oil prices to aim for the $80.00 threshold.
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