WTI recedes from tops near $56.70 ahead of API report
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WTI recedes from tops near $56.70 ahead of API report

  • Prices of WTI add to Monday’s gains near the $57.00 mark.
  • Libya’s Sharara oilfield resumes activity albeit at a slow pace.
  • API weekly report on US crude oil stockpiles coming up next.

Prices of the barrel of West Texas Intermediate are edging higher on Tuesday, rebounding from the $55.90 area and reclaiming the critical $56.00 mark.

WTI looks to data, API

The barrel of WTI keeps the positive performance intact so far this week, managing to retake the $56.00 mark and above ahead of the usual weekly report on US supplies by the American Petroleum Institute scheduled for later in the day.

The improved momentum in the risk-associated assets has been underpinning the rally in crude oil since the start of the year from the $44.00 region to the current 38.2% Fibo retracement of that October-December sharp sell off. In addition, momentum has derived almost exclusive support from the progress in US-China trade talks.

WTI managed to leave behind today’s initial weakness following reports that the Sharara oilfield – Libya’s largest – has re-started its activities albeit at a gradual pace. It is worth recalling that this oilfield has been closed since December and is always in the centre of insurgent attacks.

Moving forward, the API weekly report is due today ahead of tomorrow’s report by the government and Friday’s oil rig count elaborated by driller Baker Hughes.

What to look for around WTI

The (apparent) proximity of a trade agreement between US and China keeps supporting traders’ sentiment and collaborates with the view of higher prices. Also sustaining prices, US supply conditions are expected to remain tight amidst US net imports in historic low levels and the expected increasing activity in refiners ahead of the summer session. Added to this scenario, the so-called ‘Saudi Put’ plus the current OPEC+ agreement to curb production should also add to the bullish prospects of prices along with current US sanctions on Iranian and Venezuelan oil exports.

WTI significant levels

At the moment the barrel of WTI is gaining 0.65% at $56.61 and a break above $57.60 (2019 high Mar.1) would open the door to $58.00 (high Nov.16 2018) and finally $59.63 (50% Fibo retracement of the October-December drop). On the other hand, the initial support emerges at $55.10 (21-day SMA) seconded by $54.73 (low Feb.26) and then $51.99 (55-day SMA).

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