WTI: Recovery from China data-led dip extends beyond $ 60 mark
|- Risk-on wave grips Europe, aids WTI recovery from weak China GDP-led drop.
- Gains remain capped as US refineries remain operational despite Storm Bary.
- Easing Iranian geopolitical tensions and USD uptick to keep recoveries in check.
WTI (futures on Nymex) is seen enjoying good two-way price movements so far this Monday, having dipped to 59.85 on sluggish Chinese growth numbers in the Asian trades.
The bulls managed to fight back control in the European session amid a renewed risk-on wave, as reflected by higher Treasury yields and US equity futures. Further, the European equity markets are recovering the early losses.
However, the latest reports hinting towards easing geopolitical tensions surrounding the Iranian nuclear commitments and a broad-based US dollar recovery raise doubts on the strength of the latest oil-price recovery.
A spokesman for the Atomic Energy Organization of Iran noted that Tehran is reducing its commitments to the Joint Comprehensive Plan of Action (JCPOA) in order to launch a diplomatic mechanism to save the nuclear deal.
Moreover, the further upside could remain capped amid no immediate supply risks, as the US refineries, in the face of Tropical Storm Barry, continued to operate despite flood threats. Meanwhile, markets continue to weigh in the slowest expansion in the Chinese economy over the last 27 years and its impact on the crude oil demand.
Focus now shifts towards the US weekly crude supply reports and fresh trade/ geopolitical developments for the next direction on the prices.
Levels to watch
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