WTI retraces from week-long highs, holding above $ 65.50

• WTI attracts some purchases on Tuesday and turns positive for the third day in a row.
• The rally does not appear to be affected by the possibility of an additional supply of crude from Iran.
• The prevailing risk appetite and sustained selling bias around the USD continue to support the bullish move.
• Concerns about the continued increase in COVID-19 cases could limit any additional benefits.

The WTI has soared to new one-week highs, near the $ 66.50 level, at the start of the American session on Tuesday, although it has regressed rapidly since then. At the time of writing, the WTI price remains positive on the day above the $ 66.00 level.

Black gold has now returned to the positive territory for the third day in a row and is looking to build on its strong momentum from the three-week lows around $ 61.00 touched last Friday. The bulls do not appear to be affected by the possibility of additional supply from Iran, which has the fourth largest oil reserves in the world.

The fifth round of negotiations between the United States and Iran resumed in Vienna on Tuesday. However, the price action seems to suggest that the market does not expect the nuclear deal to be reinstated in the near future. This, in turn, suggests Iranian oil exports are unlikely to return quickly to the world market.

In the meantime, prevailing bearish sentiment around the US dollar has acted as a tailwind for dollar-denominated commodities, like oil. This has turned out to be the key factor behind a modest rebound in oil prices during the second half of the day. That said, concerns that rising COVID-19 cases in some Asian countries could hamper a fragile recovery in fuel demand could prevent bulls from opening aggressive positions.

This makes it prudent to wait for some solid continuation buying above the monthly highs around the $ 67.00 / barrel level before positioning for any further bullish movement.

WTI technical levels