- WTI short covering underway and oil has spiked into a key bullish zone, making a high of $57.57bbls on Wednesday as with the market expecting tighter global crude supplies and hopes of a trade deal announcement or at least positive progress from the US and China.
Prices are now extending their streak of gains to a sixth consecutive session, kept afloat by 'deteriorating production from exempt countries and the reality that Saudi Arabia has shouldered the responsibility for pursuing a balanced market," analysts at TD Securities explained.
"The country is firmly targeting higher prices," the analysts added.
However, the U.S. Energy Information Administration said in a monthly report Tuesday that it expects oil production from seven major U.S. shale plays to climb by 84,000 barrels a day in March to 8.398 million barrels a day.
This will make today's data from the API key and tomorrow's EIA that will release its separate, weekly petroleum status, a day later than usual due to the Presidents Day holiday earlier in the week. Tomorrow's EIA data is expected to show an increase of 3.5 million barrels in crude stockpiles for the week ended Feb. 15 and to forecast supply declines of 1.1 million barrels for gasoline and 1.4 million barrels for distillates.
FOMC in focus
While supply and demand is a fundamental driving contributor to the price action today, the dollar is also on the backfoot and helping buoy the commodities sector. The FOMC minutes will be key today and could be a catalyst that might just cap the rally if the minutes are not as dovish as the market might hope for. Key attention will be paid to QT or any mention of it in the minutes. Anything less than dovish, in line with Mester and Williams, (neutral), the dollar could firm and cap the price of oil today.
WTI levels
US crude has been closing above the 38.2% retracement of the October to December sell-off at 55.55 and looks to close above the 100-day MA at 56.69. The price is also now above the Ichimoku cloud with the price well below the trending lagging span that indicates that the bull trend is well entrenched. Eyes are on 60.00 if the price can hold above 56.50 on a daily closing basis which could encourage adding to longs mentality from traders. On the flip side, a break back below the 38.2% fibo would target 55.80 (S1) and the day's lows.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.