WTI consolidates gains below $72.00 as recovery loses momentum
- WTI is staying relatively calm following two-day rally.
- Crude oil inventories in the US rose last week.
- Eyes on Baker Hughes' weekly US Oil Rig Count data.
After suffering heavy losses at the start of the week, crude oil prices managed to rebound sharply in the previous two days. The barrel of West Texas Intermediate (WTI), which fell to its lowest level since May 24 at $65.06 on Tuesday, gained nearly 8% in the second half of the week before going into a consolidation phase. As of writing, WTI was posting small daily gains at $71.80.
Risk flows help oil find demand
Renewed concerns over the spread of the coronavirus delta variant weighing on the energy demand put oil prices under pressure. Moreover, OPEC+ decision to ramp up the group's output by 400,000 barrels per day each month from August put additional weight on WTI's shoulders.
Nevertheless, the positive shift witnessed in risk sentiment and bargain shopping triggered a decisive recovery in oil prices.
Meanwhile, the data from the US showed that crude oil inventories increased by 2.1 million barrels in the week ending July 16, compared to market expectation for a decline of 4.4 million barrels. Later in the day, Baker Hughes Energy Services will release the weekly US Oil Rig Count data.
Technical levels to watch for
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
