WTI rebounds 3% from three-week lows, regains $38 mark

• WTI lifted by Trump’s recovery news-led risk-on mood.
• Norwegian Equinor’s oilfields shutdown also boosts oil.
• All eyes remain on Trump’s health updates and market sentiment.

WTI (futures on Nymex) reverses more than half the Friday’s sell-off, as the rebound gathers steam from three-week lows of $36.63 on Monday. The US oil trades above $38 mark, as we write, adding almost 3% so far.

Oil buyers returned at the start of the week in tandem with risk appetite after investors cheered the improvement in US President Donald Trump’s health condition, citing his potential discharge from the hospital.

Trump’s health progress eased political uncertainty in global markets and lifted the overall risk sentiment.  The market optimism diminished the safe-haven demand for the US dollar, in turn, benefiting the USD-denominated oil.

Collaborating with the renewed upside in the black gold, the Norwegian energy giant, Equinor, announced a shutdown of its four major oil and gas fields due to an extension of the labor strike.

Norwegian Oil and Gas Association (NOG) reported, via Reuters, “the escalation could cut Norway’s petroleum production capacity by as much as 330,000 barrels of oil equivalent per day (boepd) or 8% of total output.”

However, it remains to be seen if the bounce holds up amid an increase in Libyan oil output and further developments concerning President Trump’s health. Also, a rise in the US oil rigs count also remains a cause for concerns for the oil bulls ahead of the weekly crude supply reports.

WTI technical levels to watch

“The daily chart shows the black gold has bounced from the head-and-shoulders neckline support at $36.70. A close below that level would confirm a bullish-to-bearish trend change and create room for a sell-off to $29.88 (target as per the measured move method),” FXStreet’s Analyst Omkar Godbole explained.

WTI additional levels