- WTI picks up strength in tandem with risk-on sentiment.
- Hopes of OPEC+ output cuts extension offer support.
- All eyes on API data and Russia’s output cuts decision.
WTI (July futures on Nymex) broke its bullish consolidative phase to the upside in the European session and clinched fresh three-month highs at 36.48.
At the press time, the US oil gains over 2.50% to trade at 36.35, extending the bullish momentum into a sixth straight week. The main catalyst behind the latest leg up in the higher-yielding oil is the fresh risk-on rally in the European markets, as the optimism over the post-coronavirus economic recovery firms up.
More so, markets remain hopeful ahead of the OPEC and its allies (OPEC+) meeting to decide on the oil output cuts extensions beyond June. Meanwhile, Russia’s decision on its position on the extension is awaited later this Tuesday.
According to Citibank, “Most likely, OPEC+ could extend current cuts until Sept. 1, with a meeting set before then to decide on the next steps.” Further, some analysts predict that an extension to the output cuts could push the black gold prices to $40.
The barrel of WTI also found support from a drop in crude stockpiles at Cushing, Oklahoma, which fell to 54.3 million barrels in the week to May 29, as cited by the latest Genscape report.
In the day ahead, it remains to be seen if the prices can hold near multi-month highs, as the focus shifts to the US weekly crude stocks data due to be published by the American Petroleum Institute (API).
Analysts expect the US crude stockpiles to have increased last week, according to the latest Reuters poll.
The main driver, however, will remain the Russian decision on the OPEC+ cuts extension for the next direction in the prices.
WTI technical levels to watch
The resistances await at 37.00 (round number), 37.50 (psychological level) and 37.76 (daily classic R3).
The key supports are aligned at 35.25 (5-DMA), 34.36 (100-DMA) and 34.00
WTI additional levels
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