WTI consolidates recent gains around $64.00 during pre-NFP trading lull
- WTI stays range-bound after rallying to the fresh high since January 2020.
- OPEC+ rejected production hike consensus while stretching policies until April.
- US dollar moves failed to disappoint oil bears amid hopes of further economic recovery.
- US NFP, covid aid package update will entertain traders amid a light calendar in Asia.
WTI bulls catch a breather around the 14-month top, currently easing to $63.85, during Friday’s Asian session. In doing so, the energy benchmark prints 0.30% intraday loss after a stellar rally on economic recovery hopes and OPEC+ headlines.
Despite market expectations to cool down the oil frontier, Russia, Saudi Arabia and allies in the Organization of the Petroleum Exporting Countries (OPEC) group, known as OPEC+, refrained from any output cuts during the latest meeting. The global oil producers even rejected the recovery in the US shale output while extending the current policies until April.
Not only the OPEC+ news but the progress of US President Joe Biden’s $1.9 trillion covid relief bill in the Senate join the coronavirus (COVID-19) vaccine news to favor the oil bulls.
On the contrary, a one-year high of the US 10-year Treasury yields and the yearly top of the US dollar index (DXY) challenge the WTI buyers even as Fed Chair Jerome Powell tried to defy the bond bears during late Thursday.
Looking forward, the latest retracement is likely to prevail amid a lack of major catalysts in Asia as well as the typical pre-NFP trading lull. However, market optimism can keep the oil buyers hopeful unless any drastic disappointment from the US employment figures for February.
Read: Nonfarm Payrolls Preview: Dollar booster? Three expectation downers pave way for upside surprise
Technical analysis
With a clear bounce off 21-day EMA, needs to mention the sustained trading beyond an ascending support line from November 2020, WTI is set to challenge the 2020 high of $65.45. However, any pullback below the February top near $63.70 may redirect the black gold towards a 21-day EMA level close to $60.00.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
