WTI eyes multi-year highs near $80 amid encouraging fundamentals
- WTI extends Thursday’s turnaround, as a test of the $80 mark looks imminent.
- Persisting energy supply crunch, gas to oil switch support the US oil.
- Doubts over the US’ release of oil from its strategic reserves underpin.
WTI (NYMEX futures) is off the two-day highs of $79.61, although remains firmly bid on fundamental factors favoring the bullish traders.
WTI eases on cautious mood but upside risks remain
At the time of writing, WTI is trading $79.35, up 1.25% on the day, poised for a 5% weekly gain.
The retreat in the black gold could be attributed to the cautious market mood, thanks to the re-emergence of concerns about China’s debt-laden property sector and a typical pre-NFP caution trading.
However, the underlying bullish momentum in the US oil remains intact amid a few signs of waning energy supply crunch. Further, increasing demand for oil, as some industries switch from high-cost natural gas to oil, also underpins the sentiment around WTI.
Oil price also benefited from a statement from the US Department of Energy, which cited that it has no plan 'at this time' to tap into the strategic oil reserves to stem the upsurge in the black gold.
The passage of the US debt ceiling bill also cheered the investors, who look to higher-yielding assets such as oil to find trading opportunities.
Markets now look forward to the US NFP release for fresh hints on the Fed’s next policy move, which is likely to have a significant impact on the markets, eventually influencing oil prices.
WTI technical levels to consider
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
