WTI clings to 21-day SMA amid rising US oil supplies and upbeat sentiment

• The WTI regains the 21-day SMA, helped by appetite for risk.
• Rising US crude stocks and uncertainty ahead of the OPEC + meeting keep sellers hopeful.
• The focus remains on EIA crude inventories and US macroeconomic data.

The WTI (futures on NYMEX) is moving higher for the first time in four days during the European session on Wednesday, as the corrective pullback from the yearly highs of $ 63.71 appears to have come to a halt. At the time of writing, WTI is moving slightly higher around the $ 60.00 level.

The risk appetite in the markets bodes well for higher-yielding oil, helping it to recoup some of this week’s losses. Expectations of a rapid global economic recovery, amid the rapid deployment of covid vaccines, boost investor sentiment.

Although the bulls remain cautious amid an unexpected surge in US crude stocks, as reported by the American Petroleum Institute (API) on Tuesday night. API data showed that US crude stocks increased by 7.4 million barrels in the week to February 26 against expectations of a 928,000 barrel reduction.

Looking at the WTI daily chart, the bulls are defending critical short-term support at the 21-day moving average at $ 59.64.

A daily close below that level could negate the uptrend in the short term, exposing a continuation of corrective declines.

The next relevant support is seen at the February 21 low at 57.32$.

The 14-day RSI has turned higher while holding above the midline, suggesting that a bounce towards the $ 61.00 level could be in the offing.

The next direction in prices depends on the change data for US crude stocks, which will be released by the Energy Information Administration (EIA) later this Wednesday.

WTI gráfico diary