- WTI lifted by price-war truce hopes, Chinese oil buying news.
- Risk-off amid coronavirus concerns to keep the gains capped.
- Focus on Saudi-Russia talks and risk trends for fresh directives.
WTI (oil futures on NYMEX) extended the recent recovery mode and rallied as high as $22.55 before trimming gains to now trade back below the 22 handle. The black gold dipped briefly below the 20 mark on Wednesday.
The barrel of WTI jumped nearly 10% on Thursday amid increased expectations of a truce on the Saud-Russia price war, especially after US President Donald Trump said Wednesday that he expected Saudi and Russia to reach a deal to put an end to the price war.
Further, the sentiment around the US oil got an added boost after Bloomberg reported some sources, as saying that China is considering ramping up its strategic petroleum reserves, taking advantage of the sharp drop in the prices. Note that China is the world’s second-largest consumer of oil.
Over the last hour, the bulls are seen taking a breather, as they assess a potential oversupply situation brewing up, with Saudi’s Aramco upping its oil output and the US crude supplies continue rising.
The US crude stockpiles rose 13.8 million barrels in their biggest weekly increase since 2016, the latest Energy Information Administration (EIA) showed. Markets now look forward to the fresh developments surrounding the Saudi-Russia talks on the price war. In the meantime, the broad market sentiment will continue to play out, in the face of mounting global growth concerns due to the coronavirus pandemic.
WTI technical levels to consider
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