WTI flirts with $61.00 amid fresh challenges to risk-on mood

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  • WTI fades bounce off one-week low after declining for two consecutive days.
  • Covid woes, pre-ECB cautious and deadlock over US infrastructure spending add to the upside filters.
  • Hopes of US-Iran peace battle Sino-American and Russia-Ukraine tussles to test the traders following downbeat EIA inventories.

WTI wavers around $61.00, near the one-week low, amid the initial Asian session trading on Thursday. The black gold dropped during the last two consecutive days before recently waiting for fresh clues even as market sentiment wanes.

Although the Bank of Canada’s (BOC) 25% tapering to the weekly bond purchase propelled risks on Wednesday, the coronavirus (COVID-19) updates from Asia and the geopolitical tension between Russia and Ukraine, as well as US-China tension, test the risk-on mood. Furthermore, Australia’s recent rejection of China’s Belt and Road initiative also seems to push Beijing towards further punitive measures over the Oz nation.

Read: Fresh Aussie-China tussle, US infrastructure spending bill talks and covid woes can weigh on sentiment

Against this backdrop, S&P 500 Futures drop 0.20% after Wall Street snapped a two-day losing streak.

It should be noted that the US tried to appease Iran during the nuclear talks, via lifting sanctions over Tehran’s central bank, the national oil and tanker companies, as well as steel, aluminum and other sectors, per the Wall Street Journal (WSJ). The move should be considered positive for WTI prices as it will offer Iran more venues for its oil.

However, the recent jump in oil inventories, as well as scheduled run-up in the OPEC output, could test the energy bulls.

Above all, today’s European Central Bank (ECB) meeting and the US dollar’s reaction to the same will be the key to follow.

Read: European Central Bank Preview: Five reasons for Lagarde to lift the euro

Technical analysis

Although 50-day and 21-day SMA may keep WTI moves tamed inside the $60.80 and $61.55 range, an upward sloping trend line from April 05, near $60.50, keeps the buyers hopeful.

 

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