WTI corrects sharply from two-year tops, looks to test $66 mark

WTI (futures on NYMEX) is on a steady corrective decline from over two-year highs reached at $67.81 earlier in the Asian session.

The black gold rallied hard following reports that Yemen’s Houthi forces fired drones and missiles at a Saudi Aramco facility at Ras Tanura, which vital to the Kingdom’s petroleum exports.

The upbeat tone around oil prices was also bolstered by the risk-on market mood after the US Senate passed the massive $1.9 trillion stimulus bill over the weekend, bolstering expectations of a quicker economic recovery.

Although, with the US Treasury yields resuming their uptrend, investors turned cautious due to fears of overheating, which dented the appetite for riskier assets, including oil. WTI now trades at $66.34, still up 0.42% on the day.

Last week, the black gold drew support from the OPEC and its allies (OPEC+) decision to rollover oil output cuts next month against expectations of a production hike. Markets ignored the unexpected build in the US weekly crude stockpiles, as it was mainly in response to the Texas deep freeze-led refineries shutdown.

Brent oil surged above $70 a barrel for the first time since the COVID-19 pandemic began.

Attention turns towards the sentiment on Wall Street and Treasuries market for further cues on the prices. Markets also look forward to the US weekly crude supply reports and stimulus developments.

WTI: Technical levels