WTI clings to gains near 1-1/2 week tops, comfortably above $61.00/barrel

• WTI gained traction for the third consecutive session and climbed to over one week tops.
• Higher crude demand forecast for 2021, Tuesday’s bullish API report remained supportive.
• Weaker USD provided an additional boost ahead of Powell’s speech and official EIA report.

WTI crude oil built on its steady intraday ascent through the first half of the European session and climbed to one-and-half-week tops, around the $61.25-30 region in the last hour.

A combination of supporting factors assisted the commodity to prolong this week’s positive move and gain some follow-through traction for the third consecutive session on Wednesday. The Organization of the Petroleum Exporting Countries on Tuesday increased its 2021 global oil demand forecast by 100,000 barrels per day (bpd).

Adding to this, the International Energy Agency also raised its annual demand forecast by 230,000 bpd to 5.7 million bpd. Further supporting the market was a report from the American Petroleum Institute (API), which showed that crude stocks declined more than estimated, by 3.6 million barrels during the week that ended on April 9.

Apart from this, a weaker US dollar was seen as another factor that extended some support to dollar-denominated commodities, including oil. The USD tumbled to three-week lows in reaction to Tuesday’s rather unimpressive US CPI report, which failed to provide strong evidence of broadening price pressures in the US economy.

That said, concerns about increased oil production in the US and rising supply from Iran might hold bulls from placing aggressive bets. This, along with worries over stalled vaccine rollouts worldwide and soaring COVID-19 infections in India and Brazil might keep a lid on any further gains for WTI, at least for the time being.

Traders now look forward to the official inventory data from the US Energy Information Administration (EIA), due later during the early North American session on Wednesday. Apart from this, a scheduled speech by Fed Chair Jerome Powell might influence the USD and contribute to produce some trading opportunities around the commodity.

Technical levels to watch