WTI alternates gains with losses around $52.00/bbl

The WTI keeps the topside intact near $52.00 per barrel.
US crude oil supplies dropped near 1.7M barrels according to EIA.
Rally remains sustained by Saudi Arabia projected output cuts.

Pablo Piovano FXStreet

Prices of the barrel of the WTI remain sidelined around the $52.00 mark today in what it looks like a pause in the recent sharp up move.

WTI up nearly 25% since December lows

After bottoming out in levels last seen in June 2017 near $42.20 (December 24), crude oil prices managed to stage a massive 25%-ish rebound to yesterday’s YTD peaks around $52.50.

The rally has been sustained by a change of heart in traders after the OPEC+ clinched a deal in November to curb the oil output starting this month. Additionally, news that Saudi Arabia plans to cut its output further has been adding extra oxygen to the up move.

Furthermore, the renewed selling bias around the greenback is also providing additional support to the USD-denominated assets along with rising optimism over a US-China trade deal.

The strength of the ongoing rally was evidenced yesterday, as prices barely paid attention to the lower-than-expected 1.68M barrels draw in US supplies reported by the EIA.

WTI significant levels

At the moment the barrel of WTI is down 0.02% at $52.58 and a breakout of $52.48 (2019 high Jan.9) would aim for $53.88 (55-day SMA) and finally $54.48 (high Dec.4). On the downside, the next support lines up at $48.05 (21-day SMA) seconded by $47.93 (10-day SMA) and then 42.22 (2018 low Dec.24).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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