- A combination of supporting factors brought WTI crude oil to the highest level since October 2018.
- Prospects for a strong recovery in demand, risk appetite continued to support momentum.
- Expectations of an increase in the global supply of crude could prevent the bulls from making aggressive bets.
Crude oil WTI it skyrocketed to the highest level since October 2018, around $ 68.70 in the last hour, although it fell back a bit afterwards. Oil last traded at $ 68.50, up 3.50% on the day.
Black gold added to its strong intraday gains and continued to climb higher during early trading on Tuesday. The momentum was supported by an optimistic outlook for the global economic recovery and the expectation of increased demand for fuel during the summer driving season in the United States.
Indeed, OPEC’s technical committee confirmed on Monday forecasts of a six million barrels per day rebound in global oil demand in 2021. Oil prices were also driven by prevailing risk appetite and bearish sentiment around the US dollar, which tends to benefit dollar-denominated commodities, including oil.
The strong momentum could also be attributed to some technical buying on a sustained move past a large bid zone near $ 68.00. That said, expectations of more production hitting the market could prevent the bulls from making aggressive bets and keep any further gains limited, at least for now.
Reuters, citing two sources familiar with the matter, reported on Tuesday that the OPEC + Joint Ministerial Monitoring Committee (JMMC) recommended that producers stick to the agreed oil production policy until July. It should be remembered that OPEC + decided in April to return 2.1 million barrels per day of supply from May to July.
Looking at the technical picture, the acceptance above $ 68.00 could have already laid the foundation for additional gains. The bullish outlook is reinforced by the fact that the oscillators on the daily chart are still far from being in overbought territory. Therefore, some trailing force, towards the recovery from the $ 69.00 level, remains a clear possibility.
Technical levels
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
