WTI jumps to over one-week tops, around $63.50-60 region

WTI crude oil broke out of its intraday consolidative trading range and shot to over one-week tops, around the $63.55-60 region during the mid-European session.

The black gold attracted some dip-buying on Wednesday and turned positive for the second consecutive session, bulls now looking to build on this week's solid bounce from the $61.60 area. That said, the fundamental backdrop should keep a lid on any runaway rally for the commodity.

On Tuesday, the OPEC+ agreed to increase the global crude oil supply from May. This comes amid worries that surging COVID-19 cases in India, Japan and Brazil will drive down fuel demand, which should hold bulls from placing aggressive bets and act as a headwind for crude oil prices.

Apart from this, a modest pickup in the US dollar demand – amid some strong follow-through move up in the US Treasury bond yields – could further weigh on dollar-denominated commodity, including oil. This, in turn, suggests that the ongoing positive move could fizzle out rather quickly.

Wednesday's key focus will remain on the latest FOMC monetary policy decision and US President Joe Biden's address to a joint session of Congress. Biden's stimulus plans should lift expectations for a relatively faster US economic recovery and provide a goodish lift to the commodity.

From a technical perspective, any subsequent positive move is likely to confront resistance near the $64.00/barrel mark ahead of monthly swing highs, around the $64.30-35 region. A sustained move beyond will be seen as a fresh trigger for bulls and pave the way for additional gains.

Technical levels to watch