- WTI remains on the front foot while extending recoveries from Wednesday.
- Kuwait recently volunteered for output cuts ahead of the OPEC+ deal’s execution date.
- The black gold ignores downbeat growth forecasts, mild risk-off sentiment.
- US data, Baker Hughes Rig Counts and coronavirus updates are likely near-term catalysts to follow.
WTI flashes an additional day of gain, other than the previous two days, while taking the bids to $18.00, up over 5.0% a day, so far during the pre-Europe session on Friday.
While the voluntary production cut by Kuwait, ahead of the OPEC+ start line of May 01, seems to have offered an additional reason to the energy buyers off-late, efforts of the global central bankers and governments to better combat the coronavirus (COVID-19) seems to have also played its role.
Recently, the US House passed a $484 billion aid package to help small businesses fight the epidemic. Further, the Fed also facilitated the way for the minor units via streamlining the lending.
On the other hand, Reuters poll suggests that the global economy sees the sharpest contract on record in 2020 due to the coronavirus pandemic-led lockdowns and stall in business activity. Additionally, a lack of major positives on finding the cure for the epidemic as well as the US policymakers’ allegations on China also weigh on the risk-tone sentiment.
As a result, the US 10-year Treasury yields drop two basis points (bps) to 0.59% whereas stocks in Asia are also signaling losses around 1.0% in general by the press time.
Oil traders may now await the US Durable Goods Orders and Michigan Consumer Sentiment Index figures, followed by the weekly Baker Hughes US Oil Rig Count, for fresh impulse. Even so, any surprises from the OPEC+ and/or coronavirus cure can offer additional strength to the present pullback moves.
Technical analysis
Although a two-week-old falling trend line near $18.70 offers immediate resistance, buyers may prefer waiting for a sustained break of 21-day SMA level of $20.20 for confirmation of the current recoveries. Until then fears of the return of $10.00 can’t be ruled out.
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