- WTI cheers IEA’s optimistic outlook on global oil markets.
- Bulls shrug-off global economic gloom and firmer USD.
- Bullish EIA crude stocks data also underpin.
The Asian rebound in WTI (June futures on Nymex) gathers steam in European trading this Thursday, as the bulls head towards the contract highs of 26.74 following the release of the International Energy Agency’s (IEA) monthly oil market report.
The IEA surprisingly offered an upbeat outlook on the global oil markets, citing, “the outlook for global oil markets has ‘improved somewhat’. The report also highlighted that global oil demand is seen a little stronger-than-expected.
The bullish comments from the agency’s Chief Birol further fuelled the upside in the black gold. Birol noted: ‘We see early signs of gradual rebalancing of global oil markets’. With the latest uptick, the prices have regained the upside momentum that was triggered after Saudi Arabia, Kuwait and UAE pledged to cut additional output in June earlier this week.
The unexpected drawdown in the US crude stockpiles data, as published by the Energy Information Administration (EIA) on Wednesday, also supported the move higher. US crude inventories fell by 745,000 barrels to 531.5 million barrels in the week to May 8 when compared to the analysts’ expectations of a 4.1-million-barrel increase, per Reuters.
The renewed optimism around the oil markets appears to offset the broader global recession fears, as the demand for the higher-yielding oil remains unabated. Attention now turns towards the US weekly Jobless Claims for fresh insights on the US economy, hit by the coronavirus pandemic.
WTI technical levels to watch
The immediate resistance is now at 26.74 (June contract high), above which the 27 level will be tested. Any pullback could meet fresh demand around 26.00, below which sellers will target the 5-DMA at 25.29.
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