- WTI takes the bids to the highest since March 06 after gap-up opening to $39.65 at the week’s start.
- Bulls cheer OPEC+ supply cut extension, Saudi Arabia’s price hike to stay firmer above $40.00.
- Broad risk-on sentiment also favors the commodities amid hopes of faster economic recoveries.
- Risk catalysts, oil updates could offer immediate direction amid a light calendar.
WTI is on the bids near $40.55, the highest since March 06, during the early Asian session on Monday. In doing so, the energy benchmark reacts to the weekend news surrounding the OPEC+ agreement to extend the global production-cut accord. The black gold also benefits from the price-positive news from Saudi Arabia and Iraq off-late.
Read: What you need to know as markets open: Risk-on as investors cheer astonishing NFP
The Organization of the Petroleum Exporting Countries (OPEC) and its allies including Russia, mostly known as OPEC+, agreed over the weekend to extend the current output cuts of 9.7 million barrels per day (bpd) by one more month, that is, till the end of July.
On the other hand, Bloomberg conveyed the news of Saudi Arabia’s biggest price increase for crude exports in two decades to bolster the oil market. Furthermore, Iraqi Finance Minister Ali Allawi said on Sunday, per Reuters, that OPEC agreement contributed to a threefold increase in oil prices. The diplomat also said the nation is committed to OPEC+ oil output cut deal until the end of its term.
In addition to oil-relating news, the broad increase in the market’s risk-tone sentiment, mainly backed by Friday’s upbeat US and Canadian employment numbers, also favored the black gold please the bulls.
Given the lack of major data/events on the calendar, traders may keep eyes on the qualitative catalysts for fresh impulse. Herein, the recent US-China tussle, over the American lobsters, might challenge the optimists. However, increasing hopes of a faster economic recovery may keep the buyers strong.
Technical analysis
Only if the energy benchmark drops back below March 11 top near $36.65, the sellers might enter otherwise the black gold’s rush to fill the gap below March 06 low of $41.26 can’t be ruled out.
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