WTI crude oil prices rise more than 1% on growing optimism in China market

In the mid-Monday North American session, WTI crude oil prices continued to climb, trading at $78.78 per barrel, marking a gain of 1.13%. The price has pierced the 20 and 50-day Exponential Moving Averages (EMAs), indicating bullish momentum, with buyers now setting their sights on the $80.00 per barrel mark.

Growing optimism that China’s May Day holiday will increase travel and fuel demand boosted the market. Booking for overseas trips for the May Day holiday continued to recover, but numbers remain far from reaching pre-Covid levels. Although oil prices jumped, the uneven economic recovery in China from the Covid-19 pandemic keeps oil prices fluctuating.

In addition to the anticipated boost in demand from China’s holiday season, OPEC+ production cuts have also contributed to the rise of WTI crude oil prices. The group plans to continue shrinking output as they meet again in May 2023.

Another factor underpinning WTI’s rise is that Iraq’s northern oil exports are showing few signs of restarting after a month of standstill, as an agreement between Baghdad and the Kurdistan Regional Government (KRG) has not yet been fully resolved, according to four sources.

WTI Technical Analysis

WTI remains neutral to downward biased after falling below the 200-day Exponential Moving Average (EMA). The recent dip below $80.00 a barrel exacerbated a drop beneath the crucial EMAs, at around the $77.29-$78.44 area. But, overall US Dollar (USD) weakness, China’s holiday lifted oil prices higher. Upside risks lie at $80.00, followed by the 200-day EMA at $81.75. Conversely, it could extend its losses beneath the 50-day EMA at $77.29.