WTI rallies to fresh tops above the $51.00 mark, EIA in sight

• The barrel of WTI regained the $51.00 mark on Wednesday.
• Traders’ focus remains on coronavirus and OPEC+ (no) cuts.
• The EIA report on US crude supplies coming up next.

Prices of the WTI have managed to rebound from recent lows and retake the key barrier at the $51.00 mark per barrel on Wednesday.

WTI focused on OPEC+, virus, data

After bottoming out in levels last seen in early 2019 around $49.30 on Tuesday, prices of the barrel of WTI has managed to regain some fresh buying interest and reverse – albeit partially – the current massive sell-off.

Crude oil prices rose along with the rest of the risk-associated assets on Wednesday in response to news that scientists could have developed a drug to counteract the Wuhan coronavirus and despite the World Health Organization (WHO) talked down that scenario soon afterwards.

Somewhat undermining the improved sentiment, Russia’s A.Novak poured cold water over the probability that the cartel could deepen the ongoing output cuts in the near future in order to tackle the gloomy prospects for oil demand following the breakout of the coronavirus in China.

Later in the session, the API will report on the weekly variation of US crude oil stockpiles. Late on Tuesday, the API reported a nearly 4.2M barrel build during last week.

The ongoing rebound is also coming from the technical perspective, particularly after crude oil prices have deeply immersed into the oversold territory (as per the daily RSI), while the ADX value (currently above 35) keep signalling a strong (down) trend.

What to look for around WTI

The outbreak of the Wuhan virus and its potential impact on Chinese/global growth have been heavily weighing on traders’ sentiment during past weeks, adding to the already rising concerns on the excess of crude oil supply in the markets and demand fears. On the supportive side for prices emerge the persistent supply disruptions in Libya, the still uncertain US-Iran scenario and rising likelihood that the OPEC+ extend the current deal or deepen the output cuts.

WTI significant levels

At the moment the barrel of WTI is gaining 3.35% at $51.09 and faces the next hurdle at $51.96 (weekly high Feb.3) seconded by $54.35 (weekly high Jan.29) and then $56.96 (200-day SMA). On the downside, a breach of $49.31 (2020 low Feb.5) would aim for $42.20 (2018 low Dec.24) and finally $41.83 (2017 low Jun.21).