- Prices of the WTI advance to $60.70 on Monday.
- US oil rig count went down by 8 last week.
- Chinese positive data help traders’ sentiment.
Prices of the barrel of West Texas Intermediate are trading on a firm note at the beginning of the week, navigating the vicinity of the $61.00 mark, or fresh yearly highs.
WTI up on China, data
Crude oil prices are up for the third session in a row on Monday as concerns over a slowdown in the Chinese economy (the largest oil importer in the world) appear somewhat alleviated in response to better-than-expected manufacturing PMI during last month.
Additionally, driller Baker Hughes reported on Friday another drop in US oil rig count, this time by 8 rigs and taking the total active oil rigs to 816.
Also collaborating with the upbeat mood, rumours that Saudi Arabia could try to push prices towards the $70 mark per barrel of Brent continue to gather traction, at the same time opening another potential conflict with President Trump’s wishes of lower prices.
Later in the week, traders will keep their focus on the usual weekly report on US supplies by the API and the EIA on Tuesday and Wednesday, respectively.
What to look for around WTI
WTI has recorded fresh multi-month tops just below the $61.00 mark per barrel today. The ongoing rally remains well supported by traders’ sentiment in line with an improved mood surrounding the risk-associated complex. Furthermore, the underlying bullish view in crude oil is expected to persist propped up by the so-called ‘Saudi put’, tight conditions in the US markets (amidst US net imports in historic low levels and the rising activity in refiners ahead of the summer session), the current OPEC+ agreement to cut oil output and ongoing US sanctions against Iranian and Venezuelan crude oil exports. In addition, speculators increased their long exposure in oil during the week ended on March 26, taking net longs to the highest level since late October 2018. Further out, the OPEC+ could announce an extension of the current agreement to curb oil production at the cartel’s meeting in June.
WTI significant levels
At the moment the barrel of WTI is gaining 1.10% at $60.60 and a breakout of $60.70 (2019 high Apr.1) would open the door for $61.62 (200-day SMA) and then $63.74 (61.8% Fibo of the October-December drop). On the other hand, the next support is located at $58.21 (21-day SMA) followed by $57.91 (low Mar.25) and finally $55.72 (55-day SMA).
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