- Prices of the WTI edge higher after testing YTD lows near $43.50
- Traders’ mood improves on the back of OPEC+, rate cuts.
- OPEC+ meeting, API, EIA reports to drive sentiment this week.
After recording fresh yearly lows in the $43.50 region, prices of the WTI have managed to regain some poise and retake the $46.00 mark and above, where are now looking to consolidate.
WTI looks to OPEC+, coronavirus, Fed
Prices of the West Texas Intermediate have rebounded of levels last seen in December 2018 in the $43.50 region amidst unremitting coronavirus fears, speculations of further easing by the Fed and the likelihood of some supportive announcement from the OPEC+ at its meeting later in the week.
In fact, crude oil prices are trading on a positive tone and are following the rest of the risk-associated universe on Monday in response to rising bets on further reductions of interest rates by the Fed as soon as the March meeting in order to tackle the potential negative effects of the fast-spreading COVID-19 on the US economy.
In addition, the renewed upbeat mood in prices follows rising hopes that the OPEC+ could announce an extension of the ongoing oil output cut deal and deeper output cuts at the march 5-6 meeting in Vienna. This view is now supported further after Russia said the country is willing to collaborate to stabilize the oil market.
Later in the week, the usual weekly reports on the US crude oil supplies by the API and the EIA are due on Tuesday and Wednesday, respectively, while the OPEC+ 2-day event will kick in on Thursday.
WTI significant levels
At the moment the barrel of WTI is gaining 1.22% at $45.65 and faces the next hurdle at $49.31 (low Feb.4) seconded by $50.37 (21-day SMA) and then $54.40 (monthly high Feb.20). On the flip side, a breach of $43.38 (2020 low Mar.2) would ai for $42.20 (2018 low Dec.24) ahead of $41.83 (2017 low Jun.21).
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