WTI recovers $80.00 and buyers eye the 100 DMA hoping for increased demand

• The encouraging data from China and the lifting of the strict Covid-19 measures will boost the demand for oil.
• The weakening of the US dollar favored WTI.
• WTI Price Analysis: It could go towards the 100 DMA around $83.00.

WTI (Western Texas Intermediate) crude oil It is gaining ground and reaching two-week highs above $80 a barrel on Tuesday, after Chinese data beat estimates and painted an upbeat picture amid reopening of its borders. Thus, the WTI trades at $81.11 BP, with a rise of more than 2.50%.

Chinese data released during the Asian session improved oil prospects for 2023. The National Statistics Office showed fourth-quarter Gross Domestic Product (GDP) improved to 2.9%, above estimates of 1.6%, while for the year as a whole, GDP stood at 3% and fell behind that of 2021, which was 8.1%. Although 2022 is the second worst reading since 1970, the relaxation of the Covid-19 measures by China would have a positive impact on its national economy.

Meanwhile, a weaker dollar makes foreign-currency-denominated oil cheaper for holders of other currencies.

Separately, the Organization of the Petroleum Exporting Countries (OPEC) reported in a monthly report that Chinese oil demand would grow by 510,000 barrels per day this year, while keeping its global demand growth forecast for 2023 unchanged at 2.22. million BPD.

WTI Technical Analysis

After bottoming around the 2022 lows of $70.10 BP during December, WTI resumed a nearly month-long uptrend that peaked at around $81.44 BP. Last Friday, WTI broke out of a two-month-old downtrend line, preventing WTI prices from falling below $78.00. Also, the Relative Strength Index (RSI) pointed to the upside, while the Rate of Change (RoC) suggests that buyers are gathering momentum.

Therefore, the first resistance level for WTI would be $81.00, which, once broken, would expose $82.00, followed by the 100 day EMA at $82.95.