|

WTI eyes to regain $53.00 as vaccine news battles risk-off mood

  • WTI keeps recovery moves from $51.80 as risks recover.
  • Updates from Moderna, AstraZeneca and Israel’s Maccabi Health Services favor risks.
  • Geopolitical problems in Libya, Russia joins Iraq’s production cut news to help the oil bulls.
  • API data, virus/vaccine updates and US fiscal package news will be important to watch.

WTI remains firm at around $52.85 during the early Asian trading on Tuesday. The energy benchmark posted the biggest gains in over a week the previous day as chatters over Iraq’s output cut joined news of a fire in a Russian refinery and dispute in Libya. The upside momentum recently gained extra strength as global leaders in the coronavirus (COVID-19) vaccine defy the latest skepticism over their products.

In its latest official update, Moderna announced its vaccine’s capacity to combat the covid virus strains initially spotted in the UK and South Africa. The firm also conveyed, a year or longer durability of its primary series of COVID-19 vaccine. Further, AstraZeneca also ruled out speculations that its vaccine has only 8% efficacy on adults over age 65.

Elsewhere, Israel’s Maccabi Health Services showed that out of the 128,600 Israeli participants in a study who had all received their second jab of the Pfizer/BioNTech vaccine, only 20 had tested positive for Covid-19 and none had been hospitalized or even experienced temperatures of above 38.5 degrees Celsius.

Read: Covid-19 Vaccine Update: Moderna vaccine effective against UK, SA strains and promising Israeli data

Talking about the oil-specific catalysts, Iraq is up for compensating for the previous breach in the OPEC decision to cut the output while Libya’s Petroleum Facilities Guard has halted all oil exports from the ports of Ras Lanuf, Es Sider and Hariga, per Reuters. Additional oil updates from Reuters also mentioned, “One man died and another was injured after a fire on Monday ripped through the Russian Ufaorgsintez oil refinery, controlled by Rosneft, the refinery said.”

It should be noted that the New York Times’ news suggesting that US President Joe Biden will announce a suite of executive actions on Wednesday to combat climate change, including a ban on new oil and gas drilling on federal land, also favored the commodity prices.

Against this backdrop, the oil prices concentrated on the vaccine optimism as well as news affecting the supply to portray the recovery. In doing so, the commodity paid a little heed to the fears of a delay in the US stimulus and a risk-off mood that favored the US dollar index (DXY).

Moving on, weekly oil inventory data from the American Petroleum Institute (API) for the period ended on January 22, prior 2.562M, will be the key for oil traders. However, major attention should be given to the vaccine news and energy headlines for fresh impulse.

Technical analysis

An upside break of a descending trend line from last Wednesday, currently around $52.55, directs WTI buyers toward a downward sloping resistance line from January 13, at $53.66 now.

Additional important levels

Overview
Today last price52.84
Today Daily Change0.73
Today Daily Change %1.40%
Today daily open52.11
 
Trends
Daily SMA2051
Daily SMA5047.84
Daily SMA10043.68
Daily SMA20039.91
 
Levels
Previous Daily High53.14
Previous Daily Low51.43
Previous Weekly High53.8
Previous Weekly Low51.43
Previous Monthly High49.43
Previous Monthly Low44.01
Daily Fibonacci 38.2%52.08
Daily Fibonacci 61.8%52.48
Daily Pivot Point S151.31
Daily Pivot Point S250.51
Daily Pivot Point S349.6
Daily Pivot Point R153.02
Daily Pivot Point R253.94
Daily Pivot Point R354.73

Author

Anil Panchal

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.

More from Anil Panchal
Share:

Editor's Picks

AUD/USD eyes 100-SMA hurdle near 0.7035 as hawkish RBA counters firmer USD

AUD/USD regains positive traction on Tuesday and climbs to 0.7030 during the Asian session, reversing the previous day's corrective slide from a one-month high as hawkish RBA rate expectations continue to support the Aussie. Spot prices, however, remain below the 100-day SMA pivotal resistance amid a firmer US Dollar as traders brace for Australia’s September CPI report on Wednesday ahead of the Fed rate decision.

USD/JPY sticks to modest gains above 157.50 as traders await Fed, BoJ meetings

USD/JPY attracts buyers for the third straight day, recovering further from a one-month low ahead of Wednesday’s FOMC decision and the BoJ policy update on Friday. Meanwhile, expectations that the BoJ may hold off on aggressive rate hikes weigh on the Japanese Yen, and the US Dollar advances to a nearly two-week high, supporting the currency pair.

Gold advances modestly past $4,000

Gold looks to consolidate Tuesday’s humble gains just above the key $4,000 mark per troy ounce. Indeed, the precious metal adds to Monday’s bounce despite the better tone in the US Dollar, mixed US Treasury yields and steady caution ahead of the FOMC event on Wednesday.

Crypto Today: Bitcoin, Ethereum and XRP on edge as sell-side pressure intensifies

Cryptocurrency prices are broadly correcting on Tuesday, led by Bitcoin (BTC) edging lower below the pivotal $80,000 level. Ethereum (ETH) mirrors Bitcoin’s neutral-to-bearish outlook, while Ripple (XRP) hovers around $1.30.

Experts agree: Fed policy outlook and geopolitical tensions keep US Dollar bid

The US Dollar Index rallies 0.6% in three days and hits fresh two-week highs above 102.00. Investors return to the US Dollar as markets brace for a hawkish hold by the Fed on Wednesday. Waning hopes of any immediate US-Iran peace deal have provided additional support to the safe-haven USD.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.