- Prices of the WTI recede from tops just below $64.00.
- The EIA reported a nearly 6M barrel drop on Wednesday.
- Baker Hughes will release its weekly US oil rig count later on Friday.
Prices of the barrel of the American reference for the sweet light crude oil add to the recent gains and approach the key level at the $64.00 mark.
WTI stronger post-China data
WTI prices have been rising since Monday on the renewed optimism around the economic recovery in the Old Continent.
This view was supported further after both the OPEC and the IEA revised up their forecasts for crude oil demand for the current year.
Collaborating with the upside, the EIA reported on Wednesday a nearly 6 million barrels drop in US crude oil inventories during last week. The data fell in line with another weekly drop reported by the API late on Tuesday.
Still on the positive side, the Chinese economy expanded at an annualized 18.3% in the first quarter, as per data released earlier on Thursday. The auspicious results were also bolstered by the robust expansion in the Industrial Production and Retail Sales.
Closing the calendar, Baker Hughes will report on the weekly drilling activity in the US later in the NA session.
What to look for around WTI
Prices of the West Texas Intermediate clinched new multi-week highs just below the $64.00 mark on Friday. While crude oil prices barely reacted to the latest OPEC+ decision to start easing the oil output cuts from May, traders’ mood remains upbeat and investors have been looking past the pandemic and refocusing instead on the progress of the vaccination campaign in Europe and the impact on growth outlook and oil demand. On another front, the strong pullback in the speculative net longs seen in past weeks could now act as a renewed source of buying interest.
Key events in the crude oil space: US oil rig count (Friday) – OPEC meeting on April 28th.
Eminent issues on the back boiler: Higher crude oil prices could spark fresh interest in US shale and potential increase in production. Demand-supply balance could prompt a moderate correction lower later in the year. Potential overheating of the oil market if current tight conditions extend into H2 2021. Bouts of geopolitical effervescence, mainly in Africa and the Middle East.
WTI significant levels
At the moment the barrel of WTI is gaining 0.03% at $63.34 and faces the next hurdle at 67.94 (2021 high Mar.8) followed by $69.71 (200-month SMA) and finally $70.00 (key level). On the flip side, a breach of $61.21 (50-day SMA) would aim for $57.28 (weekly low Mar.23) and then $55.38 (100-day SMA).