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

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.