- WTI carries the previous day’s recovery moves, from $40.00, to pierce $41.00.
- Markets sentiment stay positive after European leaders agreed to a fiscal package, stimulus from the US, Australia eyed.
- EIA expects oil demand to return to pre-virus levels in 2021.
- API inventories slumped -8.322M during the previous week.
WTI picks up bids near $41.00, up 0.45% on a day ahead of the European session open on Tuesday. In doing so, the quote extends Monday’s gains as global markets remain risk-friendly and the US dollar refreshes multi-day low. Though, the bulls are waiting for the weekly inventory data from industry source for fresh impetus.
After tough talks of five days, the European Union (EU) Summit unveiled details of 750 billion Euros of the aid package. With this, odds of the US Senators’ push for another fiscal stimulus as well as the RBA and the BOE’s reconsiderations of negative rates, also gain acceptance. Also supporting the market optimism could be upbeat data inflation from Japan and New Zealand’s Credit Card Spending.
As a result, the S&P 500 Futures gain over half a percent to cheer the break of 3,250 while stocks in Asia-Pacific also print notable gains of around 1.0% on an average. This also serves as an extra negative for the US dollar.
While citing the same, the US dollar index (DXY) refreshes the lowest levels since March 10 to 95.63, currently around 95.79. The gauge of the greenback versus major currencies also bears the burden of the coronavirus (COVID-19) woes despite news suggesting the cure of the deadly disease.
Further, the July month’s Short-Term Energy Outlook (STEO) forecasts from The US Energy Information Administration’s (EIA) also please the oil bulls. The report suggests a recovery in the energy demand to reach pre-pandemic levels in 2021.
Looking forward, Weekly Crude Oil Stock from the American Petroleum Institute (API) will be the key considering the latest slump in the energy benchmark’s inventory levels. Should the private stockpiles follow the footsteps of -8.322M prior, oil prices may inch close to June month’s top.
Technical analysis
An upward sloping trend line from June 15, currently around $40.00, restricts the commodity’s immediate downside. On the contrary, the current month’s high and June month’s top, respectively near $41.45 and $41.65 can entertain the bulls ahead of pushing them to February month’s low around $44.00.
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