WTI refreshes 11-months tops, nears $53 mark

• WTI hit the highest level since Feb 2020, just shy of $53.
• DXY’s retreat, Saudi cuts and US stimulus hopes buoy oil.
• Focus shifts to the API weekly crude stockpiles and virus updates.

WTI (futures on NYMEX) broke the Asian consolidative mode to the upside and refreshed eleven-month highs at $52.77, as the bulls eagerly look forward to a sustained move beyond the $53 threshold.

The latest leg higher in the black gold can be attributed to the retreat in the US dollar across the board, as the Treasury yields look to stabilize after the recent surge. A weaker greenback makes the USD denominated oil cheaper for foreign buyers.

Adding to the upbeat tone around oil, buyers remain hopeful that the voluntary oil output cut announced by Saudi Arabia last week would bring the market into deficit in 2021, offsetting the demand-hit due to the coronavirus lockdowns.

The bulls seem to have shrugged-off growing covid concerns worldwide, with Japan likely to extend its state of emergency into other prefectures while the UK is contemplating greater restrictions depending on the virus spread.

The main factor playing out so far this 2021 is the expectations of bigger US fiscal stimulus, which has jolted Treasury yields higher. Therefore, stimulus updates alongside covid stats will be closely eyed for a fresh take on the sentiment, eventually impacting the higher-yielding oil.

Also, of note remains the American Petroleum Institute’s (API) weekly crude stockpiles data, which will be released later in the NA session.

WTI technical levels

“… a one-week-old rising trend line, near $52.55, offers immediate resistance to the quote ahead of the recent high surrounding $52.70. In a case where the energy bulls manage to refresh the multi-month top, February 2020 peak close to $54.70 should return to the charts. Overall, the oil prices are in an uptrend while marking intermediate pullbacks off-late,” FXStreet’s Analyst Anil Panchal noted.

WTI additional levels