- Improved risk tones aid the recovery from January lows.
- Rising US supplies, global growth concerns remain a weight on the prices.
- Focus on trade wars and global equities for fresh trading impetus.
WTI (futures on Comex) broke the overnight consolidative phase to the upside in the European session, as the recovery regained traction amid the resurgent demand for higher-yielding assets, as reflected by the risk-on action in the European equities.
Moreover, a bout of profit-taking cannot be ruled out after Wednesday’s heavy sell-off to five-month troughs of 50.62. Additionally, broad-based US dollar weakness is also lending some support to the fresh leg higher. A weaker US dollar makes the USD denominated oil cheaper for the holders in foreign currencies.
However, it remains to be seen if the black gold can extend the latest bounce above the 52.50 level, as escalating US-China trade war, US-Mexico failed trade talks and rising US crude supplies continue to dampen the sentiment around the barrel of WTI.
The latest Energy Information Administration (EIA) data showed that the US crude production rose to a record 12.4 million barrels per day (bpd) in the week to May 31. Meanwhile, the US commercial crude inventories jumped by 6.8 million barrels in the same week, to 483.26 million barrels, their highest since July 2017, as cited by Reuters.
Attention now turns towards the sentiment on Wall Street and fresh trade-related developments will also offer fresh cues on the oil price-action ahead of the US macro data.
WTI Technical Levels
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