WTI hits three-week highs above $92.00 PB, as the USD extends its losses

• Western Texas Intermediate (WTI) jumps more than 4%, courtesy of a weaker US Dollar.
• Changes in China’s Covid-19 zero-tolerance stance will support higher oil prices.
• WTI could rally on OPEC’s cut to crude oil output and the EU’s ban on Russia’s oil.

The US crude oil benchmark, also known as Western Texas Intermediate (WTI), climbed sharply following the release of US employment data, which exceeded estimates, while the Unemployment Rate shows easing signs in the labor market as the Federal Reserve expects. At the time of writing, WTI exchanges hands at $91.70 per barrel after hitting a three-week high at $92.55.

The US Dollar is on the defensive, despite a goodish US employment report

The US Dollar remains soft across the board, weighed by the October US Nonfarm Payrolls report, a tailwind for dollar-denominated assets. The US economy added 261K jobs to the economy crushing the 200K foreseen by analysts, but an uptick in the unemployment rate to 3.7% from 3.5% in the previous month, increased traders speculations that the Fed would tighten but at a slower pace.

Aside from this news that Chinese authorities are looking to relax the Covid-19 restrictions would benefit oil prices, as one of the top epidemiologists said at a local investment conference that he expects “substantial changes” to the Covid-19 zero-tolerance policy.

Elsewhere, the US Dollar Index, which tracks the greenback’s performance against most G8 currencies, tumbles more than 1.50%, at 111.102, after hitting fresh two-week highs at 113.148, in the Federal Reserve aftermath.

Another factor that would keep WTI’s prices heading north is the Organization of Petroleum Exporter Countries and its allies, known as OPEC, which cut crude-oil output by almost 2 million BPD. Worth noting, the US stockpiles slid, as reported earlier in the week by the US Energy Information Administration (EIA).

The above-mentioned factors lifted WTI prices as the US released oil from the Strategic Petroleum Reserve (SPR). Nevertheless, the Eurozone ban on Russia’s oil, to begin on December 5, would put further stress on the oil supply, meaning that it could be possible that WTIs hit $100 per barrel at the end of the year.

WTI Key Technical Levels