WTI pops to 2-week highs around $61.50 ahead of EIA

• Prices of the WTI trades on a positive note around $61.50.
• The API reported a 3.6M barrel drop in US supplies on Tuesday.
• Next on tap will be the EIA’s weekly report on crude inventories.

Prices of the barrel of the West Texas Intermediate advance to new 2-week highs beyond the $61.00 mark on Wednesday.

WTI now looks to EIA

Prices of WTI advance for the third session in a row and look to break above the multi-session consolidative pattern in place since the beginning of April, always around the key $60.00 mark and with support near $57.50 for the time being.

Also supporting prices, the IEA revised up its forecasts for oil demand for this year and now expects an increase to 5.7 million bpd. The IEA’s move fell in line with the OPEC’s projections on Tuesday. Indeed, the cartel now sees the global oil demand increasing to 96.5 million bpd during the current year and the global economy to expand 5.4% ini 2021 (from 5.1%).

Still on the positive side, the API reported late on Tuesday an unexpected drop of around 3.6 million barrels during last week ahead of the EIA’s weekly report on crude oil inventories due later on Wednesday.

In the meantime, crude oil prices keep tracking the progress of the global vaccination campaign and its impact on the economic recovery and oil demand, although fresh lockdown measures my many G10 countries seem to have poured some cold water over the traders’ expectations as of late.

What to look for around WTI

Prices of the American benchmark for the sweet light crude oil move to multi-day highs past the $61.00 mark on Wednesday. Crude oil prices barely reacted to the latest OPEC+ decision to start easing the oil output cuts from May, refocusing instead on the progress of the vaccination campaign in Europe and the impact on growth outlook and oil demand. The strong pullback in the speculative net longs seen in past weeks could now act as a renewed source of buying sentiment.

Key events in the crude oil space: Weekly reports on US crude oil supplies by the API (Tuesday) and the EIA (Wednesday) – US oil rig count (Friday) – OPEC meeting on April 28^th.

Eminent issues on the back boiler: Higher crude oil prices could spark fresh interest in US shale and potential increase in production. Demand-supply balance could prompt a moderate correction lower later in the year. Potential overheating of the oil market if current tight conditions extend into H2 2021. Bouts of geopolitical effervescence, mainly in Africa and the Middle East.

WTI significant levels

At the moment the barrel of WTI is gaining 1.55% at $61.37 and faces the next hurdle at $61.55 (weekly high Apr.14) seconded by $62.25 (weekly high Mar.30) and finally 67.94 (2021 high Mar.8). On the flip side, a breach of $57.28 (weekly low Mar.23) would expose $54.98 (100-day SMA) and then $51.46 (weekly low Jan.22).