WTI breaks higher to test 59.00, fresh 4-month tops

• Tightening global supplies, risk-on continue to bolster the bulls.
• Technical set up also points to further upside ahead of US industrial and rigs data.

WTI (oil futures on NYMEX) broke its Asian bullish consolidation phase to the upside and refreshed four-month tops just shy of the 59 handle, as markets continue to cheer a potential deficit in the global supplies in the first quarter of 2019.

Deepening OPEC output combined with the reduced supply amid the US sanctions on Iran and Venezuela  led to tightened global supplies. Further, the recent EIA report showing a bigger-than-expected drop in the US EIA weekly crude stockpiles combined with a decline in the US oil production propelled the black gold further to the north.

Following the latest uptick, the prices have eased slightly but remain within a striking distance of the 2019 tops as risk-on sentiment, reflected by positive European equities on Brexit and US-China trade progress, continue to underpin the sentiment around the higher yielding oil.

Looking ahead, the barrel of WTI remains exposed to further upside risks, as suggested by the technical set up. According to FXStreet’s Analyst, Ross Burland, “a break of 59.70 and then the 61.8% Fibo of the Oct 2018 sell-off to late Dec lows at 63.74 will reveal prospects for  the 200 D SMA around 62.00.”  

WTI Technical Levels