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  • Prices of the WTI clinched new yearly tops near $68.00.
  • Upside momentum shows signs of exhaustion on Monday.
  • The API, EIA will report on crude oil supplies later in the week.

Prices of the West Texas Intermediate (WTI) sheds initial gains and return to the negative territory below the $66.00 mark per barrel on Monday.

WTI meets resistance around $68.00

Following new tops in levels last traded in later October 2018 just shy of the $68.00 mark per barrel, prices of the WTI lost some upside impetus and now recede to the sub-$66.00 area.

In fact, initial gains were boosted by the attack on Saudi facilities by Yemeni forces, although the impact of the news dwindled as officials confirmed that the damage was not substantial.

Therefore, prices of crude oil lose some momentum after the rally was exacerbated in response to the decision by the OPEC+ to extend the oil output cuts until April.

In the speculative front, net longs in crude oil climbed to levels last seen in early January near the 520K contracts during the week ended on March 2 according to the latest report from the CFTC.

Later in the week, the usual weekly report on crude oil supplies by the API (+7.356M prev.) and the EIA (+21.563M prev.) are due on Tuesday and Wednesday, respectively.

What to look for around WTI

Prices of the West Texas Intermediate keep pushing higher and reached the $68.00 vicinity per barrel, as optimism among traders remains high in the wake of the OPEC+ meeting. Increasing inflows into commodity-based ETFs, rumours that a commodity super cycle could be in the offing and rising bets for a strong global recovery (coupled with the ongoing vaccine rollout) have all been supporting the rally in crude oil in past weeks.

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 1st.

Eminent issues on the back boiler: Higher crude oil prices could spark fresh interest in US shale. 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.

WTI significant levels

At the moment the barrel of WTI is down 1.23% at $65.44 and a breach of $59.27 (weekly low Mar.3) would expose $58.60 (low Feb.19) and then $57.43 (low Feb.12). On the upside, the next hurdle is located at $67.94 (2021 high Mar.8) followed by $70.00 (key level) and finally $76.58 (2018 high Oct.3).