- Tightening supplies amid OPEC cuts, Iran sanctions continue to underpin.
- WTI to track the USD flows on US retail sales data ahead of API report.
The rebound in WTI (oil futures on NYMEX) is seen picking up pace over the last hour, as the bulls make another attempt to extend gains above the $ 71 mark amid increased expectations of tightening global supplies.
Markets believe that ongoing output cut deal by the OPEC combined with the prospects of the US sanctions on Iran would lead to tighter oil markets.
However, it remains to be seen if the barrel of WTI can sustain the bounce, as the surge in the US drilling activity alongside looming concerns over rising US output levels will likely undermine the sentiment.
Later today, the US retail sales report could have a significant impact on the US dollar-sensitive oil while all eyes remain on the weekly US crude stockpiles data due to be published by the API.
WTI Technical Levels
Omkar Godbole, Analyst at FXStreet notes: “Oil will likely see a bull flag breakout and rise towards major resistance at $74.93-$75.22 over the next couple of weeks. Bulls need to watch out for a potential failure at $71.88. However, only a daily close below $69.56 (April 19 high) would signal short-term bullish invalidation. In a larger scheme of things, acceptance below 200-month MA of $65.37 would signal a long-run bullish invalidation.”