WTI pulls back to $67.00 even as Saudi Arabian news, US stimulus probe October 2018 top
- WTI eases after week-start gap-up to multi-month high.
- Saudi Arabia increases oil prices for Asia, Iran-backed Houthi rebels said they targeted Saudi oil ports.
- US Senate passage $1.9 trillion covid stimulus, House is expected to vote on Tuesday.
- Risk news will be the key amid a light calendar.
WTI wavers around $67.00, following its run-up to the multi-month high of $67.69, during Monday’s Asian session. The energy benchmark portrayed a week-start gap-up while testing $67.00 as fundamentals concerning Saudi Arabia and the US coronavirus (COVID-19) aid package played their role. Also favoring the oil bulls could be China’s trade figures. Though, a lack of major data/events as well as the Sino-American tussle probes the quote’s immediate upside.
With 50-49 votes, the US Senate managed to approve President Joe Biden’s $1.9 trillion covid relief package, known as American Rescue Plan Act. Although the move backs reflation fears and may help the US dollar to rise further, S&P 500 Futures cheered the passage of the much-awaited stimulus and favored the commodities off-late.
Further, energy buyers also benefited from news suggesting Saudi Arabia’s hike in the official selling price (OSP) for its Arab Light crude to Asia by $1.40 per barrel. On the same line, Wall Street Journal’s (WSJ) news suggesting Iran-backed Houthi military targeted Saudi Arabia’s oil port and facilities also favored the WTI upside.
It’s worth mentioning that China’s 60% jump in Trade Balance (USD terms) during January and February, to $103.25B, offered extra strength to the prices of the black gold.
Meanwhile, China urges the US to not meddle in Taiwan and a lack of major data/events in Asia probe WTI traders off-late.
Looking forward, oil traders should wait for the US traders’ reaction to the latest passage of the covid relief package. Though, the bulls can keep reins amid expectations of further economic recovery, backed by the stimulus and vaccine hopes, as well as challenges to the oil supply, due to the turmoil in Saudi Arabia and OPEC+ production cuts until at least April.
Technical analysis
Unless witnessing a downside break of February top near $63.75, WTI bulls can aim for $70.00 comprising highs marked during late July and October of 2018.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
