- Prices of the WTI moved above $62.00 on Thursday.
- Traders’ focus remains on Texas and the impact on oil industry.
- The EIA’s report on crude oil supplies comes up next in the session.
Prices of the American benchmark for the sweet light crude oil give away initial gains and return to the sub-$62.00 levels.
WTI now focuses on EIA
The rally in crude oil prices remains well and sound despite the ongoing knee-jerk and the extreme overbought conditions of the commodity (as per the daily RSI above 81.0).
The upside momentum in crude oil prices accelerated further as of late in response to the cold weather hitting the state of Texas, opening the door to potential disruptions in the supply of the commodity for the next days.
Also supporting the WTI, US crude oil supplies dropped by 5.8 million barrels during the week ended on February 12, as per the API’s report late on Wednesday.
Coming up next is the weekly report on crude oil inventories by the EIA ahead of Friday’s US oil rig count by Baker Hughes.
What to look for around WTI
Prices of the West Texas Intermediate navigate the area of 13-month peaks above the $62.00 mark. Increasing inflows into commodity-based ETFs have been supporting the rally in crude oil along with the persistent drop of US crude oil supplies and freezing weather conditions in Texas, all amidst the favourable context for riskier assets coupled with dollar weakness. In addition, the firm growth prospects in China add to the acceleration of the vaccine rollout in Europe/rest of Asia and morph into rising expectations of a strong rebound post-coronavirus pandemic.
Eminent issues on the back boiler: Higher crude oil prices favour US shale growth. Demand-supply balance could prompt a moderate correction lower later in the year.
WTI significant levels
At the moment the barrel of WTI is losing 0.56% at $61.35 and a breach of $57.43 (low Feb.12) would aim for $51.66 (monthly low Feb.1) and then $51.71 (55-day SMA). On the upside, the next resistance is located at 62.25 (2021 high Feb.18) seconded by $65.62 (2020 high Jan.8) and finally $66.58 (2019 high Apr.23).
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