- WTI bounces-off lows, as risk sentiment gets a further boost.
- US-China worries negated by hopes of EU recovery fund compromise.
- All eyes on risk trends ahead of the API weekly crude stocks data.
WTI (July futures on Nymex) witnessed a quick bounce from daily lows of 33.52 and regained the 34 handle in the last hour, now consolidating above the latter. The focus now turns towards the American Petroleum Institute’s (API) weekly crude stocks data for a fresh trading impetus.
The US oil caught a fresh bid wave, as the risk sentiment got a boost following reports that the European Commission could likely reach a compromise on the EU coronavirus recovery fund, amounting to EUR750 billion. The European equities extended gains on the report, driving the higher-yielding oil higher in tandem.
The bulls, however, are struggling to extend the recovery gains, as escalating US-China tensions over the Hong Kong security issue continue to dampen investors’ sentiment. US President Donald Trump threatened sanctions on Beijing while the dragon-nation reiterated its commitment to take counter-measures if there is any foreign interference in Hong Kong affairs. Note that China is the world’s top oil consumer.
From a wider perspective, OPEC+ oil output cuts and global economic re-openings will likely keep the sentiment around the black gold underpinned. Also, falling US crude inventories could continue to please the buyers.
WTI technical levels to watch
On a sustained break above 34.50, the immediate resistance is seen at 35.00 (round figure), above which the 100-DMA of 35.52 will be on the buyers’ radar. To the downside, the 33.70 5-DMA could offer immediate support, below which the 33 mark will be eyed.
WTI additional levels
Share
