- WTI bulls head towards Monday’s high above 25.50
- Mid-East voluntary output cuts boost oil prices.
- Focus shifts to API data amid second virus wave fears, trade woes.
WTI (June futures on Nymex) is on a steady rise and regains the $25 mark in European trading, following a brief consolidation phase seen around 24.50 in the Asian session.
The buying interest around the black gold remains unabated, as top OPEC oil producers pledge to undertake additional voluntary output cuts next month, in an effort to ease the supply glut situation globally caused by the coronavirus crisis.
Saudi Arabia committed to cut output by a further 1 million barrels per day (bpd) in June while UAE and Kuwait offered to cut an extra 180,000 bpd in total next month. Adding to the upside in oil, Russian data showed that the country’s oil output has declined to 9.45 million bpd between the May 1-11 period.
Meanwhile, “Kazakhstan has ordered producers in large and mid-sized oil fields to cut output by about 22% in May to June, in line with the OPEC+ deal,” per Reuters.
Oil bulls remains unperturbed by fresh concerns over the second wave of the virus infection while the renewed trade tensions between Australia and China also appear to have little to no impact on the higher-yielding oil.
The uptick is also backed by the recovery in the risk sentiment, as the European equities return to the green zone after a tepid start while US equity futures erase most losses.
Attention now turns towards the US weekly Crude Stocks Change data due to be published by the American Petroleum Institute (API) later in the NA session.
WTI technical levels to watch
At the time of writing, WTI jumps 3.80% to 25.06, with the next resistance seen at Monday’s high of 25.58. A break above the latter opens doors towards 26.00. Alternatively, any pullback will meet the demand near 24.45, the intersection of 5-DMA and daily pivot point. Further south, Monday’s low of 23.67 could be tested.
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