- WTI sees a fresh leg higher as OPEC+ meeting gets underway.
- Risk-on mood amid virus hopes adds to oil’s uptick.
- All eyes on EIA data and OPEC+ outcome for fresh directives.
WTI (August futures on Nymex) broke the Asian consolidative mode to the upside in Europe, as the bulls tested the 41 mark amid a fresh risk-on wave that gripped the markets. Moderna’s promising results towards a coronavirus vaccine lifted the overall market sentiment.
Further, traders resorted to cover their shorts positions ahead of the key OPEC and its allies’ (OPEC+) decision on the output cuts policy. The black gold dipped as low as 39.13 on Tuesday after expectations over OPEC+ easing output cuts picked-up pace. The cuts are expected to taper to 7.7 million bpd until December.
The oil bulls, however, were rescued by a bigger-than-expected drop in the US crude inventories, as reported by the American Petroleum Institute (API). The API data showed late Tuesday, the US crude stockpiles fell by 8.3 million barrels in the week to July 10, beating expectations for a decline of 2.1 million barrels, per Reuters.
Looking ahead, it remains to be seen if the upside bias remains intact in the barrel of WTI ahead of the critical OPEC+ decision and Energy Information Administration (EIA) weekly crude supplies report. The sentiment on the global market will also remain in play.
WTI technical levels to watch
“In a case where the oil prices remain weak past-$39.15, the late-June month’s bottom surrounding $37.10 should return to the charts. Alternatively, a clear break beyond $41.00 needs validation from June month’s top of $41.65 and 200-day EMA, currently around $41.80, to aim for February’s low close to $44.00,” explains Anil Panchal, FXStreet’s Analyst.
WTI additional levels
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