WTI recedes from tops beyond the $50.00 mark

The barrel of WTI clinches fresh tops above the $50.00 mark.
Saudi Arabia said it will cut 1M bpd for the next two months.
The EIA’s weekly report on US crude oil supplies comes up next.

Pablo Piovano FXStreet

Prices of the barrel of the American benchmark for the sweet light crude oil tested levels last seen back in February beyond the psychological $50.00 mark earlier in the session, just to lose some ground afterwards.

WTI up on Saudi Arabia news, looks to EIA

Prices of the West Texas Intermediate finally surpassed the key $50.00 hurdle backed by positive news from Saudi Arabia. In fact, the country said it will cut its oil production by 1M bpd for the next two months.

Following the Saudi Arabia’s news, and reinforcing the upside, the OPEC+ will not increase its production (or at least not in the original levels) next month, as concerns over the rising coronavirus cases and the potential impact on the industry appear to have re-surfaced.

Late on Tuesday, the API reported a nearly 1.7M barrels drop in US crude oil supplies, more than initially estimated. Later on Wednesday, it will be the EIA’s turn to report on crude oil inventories during last week.

WTI significant levels

At the moment the barrel of WTI is losing 0.29% at $49.66 and a breach of $47.20 (monthly low Jan.4) would expose $46.18 (low Dec.23) ahead of $43.94 (monthly low Dec.2). On the upside, the next hurdle emerges at $50.57 (monthly high Jan.6) seconded by $54.45 (monthly high Feb.20) and finally $59.61 (high Jan.20 2020).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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