- WTI has bounced from session lows below $118 to approach $120 despite a risk-free opening on Wall Street.
- Several themes are being cited as price support and encouraging buying on the dips as the bulls look for a break towards the March highs.
oil prices have rallied in late trading despite a relatively dodgy open on Wall Street after major US retailer Target gave bearish guidance ahead of the market open. WTI futures for the first month they rose a little more than 50 cents near the $120 a barrel mark, some $2.0 higher than previous session lows below the $118 level.
At the moment, WTI prices have remained range bound this week, but the bulls will no doubt be looking for a test of Monday’s multi-week highs near the $121 level, against the backdrop of numerous support issues related to crude oil. Strong demand for refined products (gasoline and diesel), evidenced by still very strong refining margins, and evidence of strong global demand in the form of an increase in the official sales price of its benchmark Arabian light crude oil to Asian customers , at a $6.50 premium to Oman/Dubai prices, are cited by analysts as supportive.
Meanwhile, the issues that were in the spotlight last week are also cited, such as the reopening of Shanghai and Beijing after months of lockdowns to contain Covid-19 and the disappointing forecast of OPEC + production increase for July and August, which was presented last week. Therefore, the backdrop for crude oil markets remains bullish, hence it should come as no surprise that declines in WTI continue to be bought.
Since mid-May, WTI has found strong support at its 21-day moving average twice and the technical uptrend appears to still be in play. In the coming weeks, many could expect WTI prices to return to the multi-year highs recorded in March in the $130 zone. In the more immediate future, US crude inventory data in the form of the latest weekly private API report at 20:30 GMT will be in the spotlight as another timely indicator of the health of US demand. . The US Energy Information Agency (EIA) will also release its monthly oil market report at 16:00 GMT, providing oil traders with some commentary to take a look at.
Technical levels
Source: Fx Street
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