WTI failed to reach $61.00 and has slipped back under $60.00, but still holds onto strong gains on the day. Economic optimism following strong US data, upbeat IMF forecasts and upbeat EIA forecasts is helping support prices. Crude oil markets trade firmly on the front foot on Tuesday, though have not been able to erase all of Monday’s steep losses; front-month WTI futures, for example, ran out of steam just ahead of the $61.00 level and have since dropped back under $60.00. WTI continues to respect its recent low-$57.00 to $62.00ish range very well, as crude oil markets continue their choppy consolidation as opposing themes such as strong economic data in some countries (namely, the US) conflict with Covid-19 outbreak concerns in other countries (like Europe and India), as well as concerns about increased supply. Driving the day There hasn’t been a great deal by way of fresh crude oil market-specific fundamental developments on Tuesday. Upbeat economic forecasts in the IMF’s latest World Economic Outlook report seem to have helped to instil some optimism in global equity and crude oil markets, with the report highlighting the fact that the US will be leading global economic growth in 2021. This comes following three consecutive sessions of strong tier one US economic data, plus we also had Chinese Services PMI numbers for the month of March last night, which were also strong. Elsewhere, the US Energy Information Agency just released its latest Short-Term Energy Outlook report in which it brought forward 180K barrels per day in oil demand growth expectations from 2022 into 2021, a reflection of expectations for a swifter economic recovery. For reference, the 2021 global demand growth forecast was upped by 180K to 5.5M barrel per day and the 2022 global demand growth forecast was downgraded by 180K barrels per day to 3.65M barrels per day. Recovery optimism as a result of the above has allowed crude oil markets to recover recent losses and has helped to distract from focus on the worsening state of the Covid-19 outbreak in a number of key global economies; India continues to experience record infection rates and Canadian PM Justin Trudeau was just on the wires talking about the seriousness of the coming third wave of infections in the country. European news is a little more upbeat, with the PM of the Netherlands talking about easing restrictions later in the month and the UK not experiencing any such third wave (helped by the fact that more than half of its adults have now had at least one vaccine) and continuing to march towards further lifting of lockdown restrictions itself. Still, as long as Covid-19 infection rates remain high in key crude oil markets such as Europe and India, crude oil is unlikely to be able to recover back to its early March highs. This is the view being expressed by a number of market participants, anyway; “the current situation is fragile, therefore revisiting the recent highs (of oil prices) … is not imminent” commented PVM analyst Tamas Varga, before adding that “until there are palpable signs of falling infection rates the oil market is likely to remain violent and hectic”. Themes to watch In terms of supply-side themes to focus on; US and Iranian officials are currently engaged in indirect talks in Vienna, Austria, with European nations acting as an intermediary. The talks are being seen as a baby step towards the US and Iran returning to the JCPOA nuclear agreement signed back in 2015 that would see Iran return to its prior nuclear commitments and the US lift economic sanctions (such as restrictions on Iran’s ability to export crude oil, not that these restrictions have stopped China from buying record amounts of Iranian crude in recent months). “With OPEC+ appearing to manage its exit for now, supply concerns will likely shift to the potential return of Iran to the JCPOA agreement” said analysts at Goldman Sachs. However, the bank thinks that the path to an agreement is still likely to take months and that other OPEC+ producers would accommodate a potential ramp-up in Iranian production. As such, the bank does not “see the potential recovery in Iran exports as an exogenous shock to the oil market”. Otherwise, attention will also be on weekly inventory data, with Private API inventories out at 21:30BST ahead of official EIA inventories at 15:30BST on Wednesday. FX Street FX Street FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions. View All Post By FX Street FXStreet News share Read Next Silver continues to climb, now eyeing key area of resistance around $25.40 FX Street 2 years WTI failed to reach $61.00 and has slipped back under $60.00, but still holds onto strong gains on the day. Economic optimism following strong US data, upbeat IMF forecasts and upbeat EIA forecasts is helping support prices. Crude oil markets trade firmly on the front foot on Tuesday, though have not been able to erase all of Monday's steep losses; front-month WTI futures, for example, ran out of steam just ahead of the $61.00 level and have since dropped back under $60.00. 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