- WTI remains elevated in the bullish territory as investors bank on stimulus.
- US data improve, keeping the demand side bid bolstered.
West Texas Intermediate crude oil is higher on the day, although has run into resistance and started to consolidate.
However, in the final part of the session on Wall Street, bulls are taking back the reins.
At the time of writing, WTI is trading at $40.63 having travelled between a low of $39.74 and a high of $40.99.
There is a focus on the demand side and the US weekly jobless claims to a new pandemic low and progress toward a fresh coronavirus aid package boosted prospects for energy demand.
The data showed initial claims for state unemployment benefits in the United States dropped 55,000 to a seasonally adjusted 787,000 last week, although the overall number was still relatively high.
A Reuters survey had forecast 860,000 claims in the latest week.
”This follows a lift in the number of people claiming an unemployment benefit last week, but these data tend to be volatile, and numbers are still historically high, so it is too early to say the job situation is improving,” analysts at TD Securities explained.
However, there is some scepticism surrounding the stimulus package.”Members have no idea what’s going on and they’re very worried about Mnuchin going too far and putting together a package they can’t vote for. They don’t trust Mnuchin. There’s hardly any trust there because they don’t think he’s a conservative,” Jeff Stein, the White House economics reporter for The Washington Post said.
Nevertheless, US stocks have rallied to session highs towards the close.
There be bulls over the horizon
Meanwhile, crude oil found support as the market is discounting an OPEC+ delay to their planned tapering.
”After all, we argue that a failure to do so would endanger a fragile rebalancing amid a continued second wave,” analysts at TD Securities explained, adding:
”With the OPEC+ put nearly at-the-money, we see a potential set-up building for an upside surprise. Normalizing demand expectations, large-scale fiscal stimulus and a potential vaccine announcement shortly following the election, along with an OPEC+ revision to their planned tapering of their historic output deal, should all conspire to offer strong support in energy markets. ”
WTI levels
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