- Receding worries about rising supply assisted WTI crude oil to regain traction on Tuesday.
- Reports that the EU will hit vaccination target earlier than projected remained supportive.
- A modest pickup in the USD demand might keep a lid on any strong gains for the commodity.
WTI crude oil refreshed daily tops during the first half of the European session, with bulls now looking to build on the momentum beyond the $60.00/barrel mark.
The black gold managed to regain positive traction on Tuesday and recovered a part of the previous day’s heavy losses to near two-week lows, around the $57.60 region. Renewed worries about rising oil supply receded amid a further easing of lockdown restrictions in the UK and strong economic data from the US.
It is worth recalling that the OPEC+ agreed last Thursday to roll back its production cuts between May and July amid signs of a strong US economic rebound. The announcement coincided with increasing Iranian production and prompted some aggressive selling around the commodity on the first day of a new trading week.
Meanwhile, reports that the EU may hit its vaccination target much earlier than projected added to the optimism and remained support. Bloomberg – citing an internal memo from EU member states – reported that Germany, France, Italy, and Spain will have enough supplies to vaccinate at least 57% of their populations by the end of June.
That said, the underlying bullish sentiment around the US dollar might keep a lid on any further gains. A stronger USD tends to dent demand for dollar-denominated commodities, including oil. Hence, any subsequent move up might still be seen as a selling opportunity and remain capped, at least for the time being.
Technical levels to watch