WTI jumps back above $41 ahead of API data

WTI (futures on NYMEX) catches a fresh bid in the last hour, as the bulls fight back control and regain the $41 level.

The higher-yielding oil once again found fresh bids near the $40.70 region after the risk tone improved amid a recovery in the European stocks and renewed hopes of a US fiscal stimulus aid. European indices attempt a bounce, as upbeat earnings reports counter coronavirus-led lockdown worries.

Meanwhile, the US dollar resumes its declines vs. its main competitors, as investors shun safe-havens amid narrowing differences between the US policymakers over the fiscal stimulus package. A weaker greenback usually makes the US dollar-denominated oil more attractive to foreign buyers.

On Monday, the black gold corrected from monthly highs of $41.47 after the disappointment from the OPEC and its allies (OPEC+) meeting. The OPEC+ reinforced its commitment to support the oil market amid dwindling demand prospects, as coronavirus cases continue to rise globally. However, the alliance failed to offer any hints on further oil output cuts.

Attention now turns towards the US weekly crude stocks data due to be published by the American Petroleum Institute (API) later on Tuesday for fresh incentives. Meanwhile, updates on the US stimulus talks will be also closely eyed for the sentiment on Wall Street and dollar price action.

WTI Technical levels

“The support line of the mentioned triangle and 200-bar SMA, respectively around $40.20 and $39.70, will act as tough nuts to crack for the WTI bears. On the flip side, the upper line of the triangle, at $41.47 now, won’t be enough to recall the bulls as September 04 high near $42.10 challenges the black gold’s further upside,” FXStreet’s Analyst Anil Panchal explained.

WTI Additional levels