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  • WTI defies Friday’s downside moves, stays firm near intraday top.
  • US hates Iran’s rejection of EU invitation for nuclear deal talks, Iraq attacks more suspected targets backed by Tehran.
  • Market chatters favor OPEC+ moves towards production hike.
  • PMIs and stimulus headlines will be important to watch.

WTI wavers around an intraday high of $69.80, currently up over 2.0% around $69.70, during early Monday. In doing so, the energy reverses Friday’s losses as risks recover in Asia amid hopes of faster economic recovery and stimulus hopes. Also favoring the oil bulls could be geopolitical tension surrounding Iran. However, talks that the OPEC+ will need to pump more output probed energy bulls.

Be it a nearly 1.0% jump in S&P 500 Futures or the US dollar’s pullback, risk catalysts favor the optimists as recent headlines suggest that the UK and the US are nearing the huge fiscal stimulus. US President Joe Biden’s $1.9 trillion covid relief package reached the Senate on Friday while UK Chancellor is up for turning down the tax hikes and offer near five billion pounds of aid to the British businesses.

Also on the risk-positive side could be the US Food and Drug Administration’s (FDA) approval of Johnson and Johnson’s one-shot coronavirus (COVID-19) vaccine, which in turn suggests faster recovery from the pandemic.

Elsewhere, Iran rejected the European Union’s (EU) idea to re-negotiate the nuclear deal, disappointing America, as expected. On the other hand, Iraq attacked various Iran-backed suspected spots in Syria over an age-old rivalry.

While the aforementioned catalysts favor the bulls, Bloomberg came out with the piece suggesting the push to the global oil producers to inflation the supply. The piece highlights depleting inventories and commodity super-cycle to say, “From trading houses in Geneva to Wall Street banks, much of the oil world agrees that global markets could use some more barrels.”

Looking forward, the month-start PMIs will offer immediate directions but major attention will be given to the risk catalyst and the US dollar moves.

Technical analysis

Unless defying the last week’s Doji at the multi-month top of $63.71, WTI buyers may remain cautious for further upside. Alternatively, a monthly support line near $60.00 challenges sellers.

 

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