WTI grinds higher towards $68.25 immediate hurdle amid risk-on mood
- WTI stays firmer around intraday high as oil traders consolidate recent losses.
- Market sentiment improves amid receding fears of Omicron, hopes of stimulus.
- Saudi Arabia raises price for Arab Light crude for Asia, markets doubt OPEC+ verdict.
- US inflation, virus updates can offer intermediate moves.
WTI crude oil prices remain positive, up 2.60% intraday around $67.90 during early European morning on Monday. The black gold prices initially cheered the market’s cautious optimism and the oil producers’ latest moves but a lack of major catalysts of late restricts the quote’s moves.
After initially hitting Europe and the UK, the virus strain tightens its grip towards reaching the key global nations like the US and China. Though, global scientists are optimistic about finding the cure for the COVID-19 strain, dubbed as Omicron. Recently, US top Medical Officer Anthony Fauci backed Pfizer’s drug to be effective against Omicron while the news of chewing gum to stop the virus spread and the UK’s push for treatment also keeps traders hopeful. Elsewhere, stimulus hopes swirl from Japan and China as both the Asian giants struggle to tame the economic fears at home.
The risk-on mood can be witnessed in mildly bid stock futures from the US and Europe as well as the firmer US Treasury yields. It should be noted, however, that the Fed rate hike fears keep oil traders challenged around multi-day low since last four days.
Oil-specific news portrays Saudi Arabia’s push to Arab light crude as well as concerns over Iran’s readiness to accept the nuclear deal proposed by the US. Additionally, the OPEC+ verdict to stick to its planned output hike of 400,000 barrels per day (bpd) per month, nothing more, also keeps oil buyers hopeful.
Moving on, weekly inventory data can offer intermediate moves but major attention will be given to Friday’s US Consumer Price Index (CPI) data for clear direction.
Technical analysis
WTI keeps the bounce off an upward sloping support line from March 23. However, bearish MACD signals and a weekly descending trend line near $68.25 challenge the energy bulls. Even if the quote rises past $68.25, the 200-DMA and the 10-DMA, respectively around $69.90 and $70.45, will challenge the WTI buyers.
Alternatively, the stated support line from March, around $64.70, becomes the key level to watch for WTI bear’s entry.
Author
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.
