WTI holds the bid in Asia, testing the $61 area

Oil prices bounced back on Wednesday and have continued to move higher in Asia.
The expectations OPEC+ producers might decide against increasing output has underpinned oil.

Ross J Burland FXStreet

At the time of writing, WTI is up 0.36%.

WTI rallied from a low of $59.27 to a high of $61.97 on the day yesterday as US fuel stocks dropped and the market weighs OPEC+ and the implications of a deal rollover.

The expectations OPEC+ producers might decide against increasing output when they meet this week lifted the black gold. Russia is also considering rolling over production cuts from March into April rather than raising output. The group had previously been widely expected to ease the production cuts on Thursday.

Meanwhile, there was a huge drop in US fuel inventories.

US gasoline stocks fell last week by the most in its history of reporting while refining output dropped to a record low as a consequence of the deep freeze in Texas that shut production.

Gasoline inventories also dropped, falling to 243.5 million barrels. Distillate stockpiles also fell by the most since 2003 to 143 million barrels.

Additionally, US President Joe Biden said that the United States will have enough COVID-19 vaccines for every American adult by the end of May. This followed news from Merck & Co that agreed to team up with rival Johnson & Johnson to help Biden accelerate shots.

WTI technical analysis

The price is on the verge of a topping pattern.

Rejection from this juncture and a downside extension of the latest bearish impulse would target the 57/ 58 support structure. If this occurs, it will complete a daily head and shoulders and make the case for a correction on the monthly chart.

Bears would target the 52 areas as a 38.2% Fibonacci correction.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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