WTI consolidates below $34.50 amid Russia’s output cuts extension news

• WTI consolidates the upside amid positive catalysts.
• US-China worries offset by vaccine hopes, supply cuts.
• Focus shifts to weekly US supply reports amid risk-on.

WTI (July futures on Nymex) was offered just above the 34.50 level in early European trading, now consolidating around the 34-mark following a brief drop to the 33.75 region.  

Despite the retreat, the black gold remains underpinned by the OPEC+ producers’ commitment to cut their production levels.

However, the bulls appear to have turned a deaf ear to the latest Reuters report, citing that Russian Energy Minister Alexander Novak is expected to discuss a possible extension of existing oil output cuts beyond June with the Russian oil companies.

The persisting risk-on mood, amid hopes of a coronavirus vaccine combined with the optimism over the re-opening up of the global economies, also offers support to the higher-yielding oil and cools-off the fears over the escalating US-China tensions.

Further, the US oil rigs count data, which showed the tally at a record low, aids the bullish momentum in the barrel of WTI. The focus now shifts towards the weekly US crude supplies report for near-term trading opportunities in the commodity.

WTI technical levels to watch

On a sustained break above 34.50, the immediate resistance is seen at 35.00 (round figure), above which the 100-DMA of 35.77 will be on the buyers’ radar. To the downside, the 33.61 pivot point could offer immediate support, below which the 33 mark will be eyed.

WTI additional levels