WTI bulls stay in charge, looking to retest multi-year highs


Share:
  • Oil is firm in the open as market attention switches to the Fed. 
  • Bulls seeking to retest the multi-year highs. 

US West Texas Intermediate (WTI) is trading at $70.98 and within a range of $70.69 and $71.01 at the time of writing.

WTI is continuing to correct following the sell-off from a multi-year high scored on Friday after it closed out a third straight week of gains on an improved outlook for worldwide demand. 

On Friday, Brent crude futures settled at $72.69 a barrel, rising 17 cents after reaching their highest since May 2019. For the week, Brent was up 1%. WTI crude futures settled at $70.91 a barrel, up 62 cents. WTI was up 1.9% on the week. Spot ended 1% higher at $70.79, rising from a low of $69.70 to a high of $71.21.

The rollout of the vaccine in North America as well as Europe is helping to restore demand.  Also, news that OPEC+ will continue to take a very cautious approach, when introducing its sequestered supply into the market, along with continued predictions that global demand is on its way back, prompted money managers to increase WTI crude length, s analysts at TD Securities explained. 

''Resulting predictions of deficits in the second half of 2021 have sent prices to their highest in some three years, which convinced traders to cover their short exposure and to increase long holdings,'' the analysts added.

''However, with WTI trading at nearly $71/b, new supply from Iran, should the nuclear deal be made and sanctions lifted, may prevent specs from taking out new aggressive long exposure, which should limit any demand optimism driven rally.''

Meanwhile, there was a focus on the monthly report by the International Energy Agency (IEA) that said the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, would need to boost output to meet demand set to recover to pre-pandemic levels by the end of 2022.

"OPEC+ needs to open the taps to keep the world oil markets adequately supplied,’’ it said, adding, ‘’It said that rising demand and countries' short-term policies were at odds with the IEA's call to end new oil, gas and coal funding. "In 2022 there is scope for the 24-member OPEC+ group, led by Saudi Arabia and Russia, to ramp up crude supply by 1.4 million barrels per day (bpd) above its July 2021-March 2022 target," the IEA said also.

In other news, the number of oil rigs operating in the US rose by six this week, according to data compiled by energy-services firm Baker Hughes for its weekly report. It was the biggest weekly increase of oil rigs in a month.
 

WTI technical analysis

Technically, the price is correcting the bid and on the verge of a retest of the prior highs and a potential support structure on the 4-hour time frame. The correction is also on the verge of a 38.2% Fibonacci retracement that has a confluence with the structure near 70.60. This is guarding more downside 70 the figure where the 78.6% Fibo meets 4-hour structure. 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content


Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content

Editors’ Picks

EUR/USD consolidates gains above 1.0800, awaits Fed Minutes

EUR/USD consolidates gains above 1.0800, awaits Fed Minutes

EUR/USD is holding gains above 1.0800 early Wednesday, having hit two-week highs on Tuesday. The US Dollar remains broadly weak, despite a mixed market mood, as investors weigh Fed rate cut bets and US government shutdown risks ahead of the Fed Minutes. 

EUR/USD News

GBP/USD clings to gains above 1.2600, all eyes on FOMC Minutes

GBP/USD clings to gains above 1.2600, all eyes on FOMC Minutes

GBP/USD is holding the renewed upside above 1.2600 in early Europe on Wednesday. The pair continues to draw support from hawkish comments from BoE Governor Bailey and an extended US Dollar weakness. The focus now shifts to the Fed Minutes, BoE- and Fed-speak.

GBP/USD News

Gold buyers retain control, with eyes on Fed Minutes

Gold buyers retain control, with eyes on Fed Minutes

Gold price sits at multi-day highs near $2,030 ahead of the Fed Minutes. US Dollar stays weak with the US Treasury bond yields, despite a tepid risk tone. Gold buyers flex muscles after recapturing 21-day SMA near $2,025. RSI flips bullish.  

Gold News

Bitcoin is 23% away from ATHs, but retail is still not here, why?

Bitcoin is 23% away from ATHs, but retail is still not here, why?

Bitcoin’s journey so far has been nothing short of shocking. From ETF approval to countries warming up to crypto regulation, the crypto landscape seems to have changed quite a bit.

Read more

Lots of dovish talk going around

Lots of dovish talk going around

The conversation around lower rates has been a theme this week after US data disappointed, Canada CPI came in soft, BoE Bailey offered up dovish comments, and China slashed rates.

Read more

Forex MAJORS

Cryptocurrencies

Signatures