WTI hits fresh weekly highs above $42.50 amid vaccine optimism

WTI (futures on NYMEX) trades better bid in Asia this Monday, close to the highest levels in eight days reached at $42.56.

Having booked a third consecutive weekly rise last week, the black gold is looking to build onto its last week’s surge, as the sentiment remains underpinned by the successful covid vaccine trials across the globe.

The UK is likely to give a green-light to Pfizer’s vaccine this week while a US official said that the vaccinations in the country will “hopefully” start in less than three weeks.

The vaccine optimism implies that life could return to normalcy in 2021, easing off global economic concerns while lifting the prospects for oil demand recovery. The upbeat market mood, also due to a likely Brexit deal this week, benefits the higher-yielding oil further.

Also, expectations that the OPEC and its allies (OPEC+) will keep the oil output curbs in place for longer collaborated with the upside in the US oil. The alliance meets on Nov. 30 and Dec. 1 and is considering options to delay output hike by at least three months from January.

In evidence of increased speculative interest in WTI, money managers raised their net long US crude futures and options positions in the week to Nov. 17 by 3,100 contracts to 277,080, the US Commodity Futures Trading Commission (CFTC) said on Friday, per Reuters.

However, fresh covid restrictions imposed in the American cities, amid the continued rise in new infections, could cap the gains in the WTI barrel. Looking ahead, the focus remains on the covid stats and US Markit Manufacturing PMIs for near-term trading opportunities in oil.

WTI technical levels

The next target for the bulls awaits at Wednesday’s high of $42.68, above which the $43 threshold will get tested. However, if the sellers fight back control, the US oil could drop back towards strong support near 41.95/90 region, where the falling trendline resistance now support coincides with the 50-hourly moving average (HMA).

WTI additional levels