WTI Crude Oil’s Uptrend Continues – Quick Daily Outlook!
Arslan Butt • 2 min read
WTI Crude oil prices closed at $66.23 after placing a high of $66.28 and a low of $64.29. Crude oil extended its gains and reached above $64 level and continued its bullish streak for the third consecutive session on Tuesday. It reached its highest level on Tuesday since March 15, above $64 level despite the strength in the U.S. dollar on the day. The rise in oil prices was caused by the optimism in the market driven by the latest news on reopening in the U.S. and Europe that is supposed to underpin the oil demand.
The states like New York, New Jersey, and Connecticut that were primarily hit by the pandemic were set to lift most of the coronavirus-related restrictions within two weeks, while Florida announced lifting all measures on Monday. The European Union has already revealed its plans to relax bans on international travel and reopening of economies. These developments raised optimism in the market that oil demand will surge and pushed WTI higher on Tuesday.
The rising oil prices were further supported by the downbeat U.S. economic data that took a toll on the greenback. At 17:30 GMT, the Trade Balance from the United States for March remained flat against the predictions of -74.4B. At 18:52 GMT, the IBD/TIPP Economic Optimism fell to 54.4 against the anticipated 56.1 and weighed on the U.S. dollar that pushed crude oil prices higher. At 19:00 GMT, Factory orders in March also reduced to 1.1% against the projected 1.3% and weighed on the U.S. dollar that added further upside in crude oil prices.
Despite dismal U.S. economic data, the U.S. Dollar Index managed to remain strong across the board and reach above 91.3 level on Tuesday amid the latest comments made by U.S. Treasury Secretary Janet Yellen. In an initial statement, she supported the rate-hike, but in the late trading session, she took a U-turn from her comments and said that she was no one to comment on monetary policy.
According to a Reuters survey, the top oil exporter Saudi Arabia is expected to cut its official selling prices for Asia in June amid the weakness in Middle East Asia benchmark Dubai and demand uncertainty due to a new wave of regional coronavirus outbreaks. The resurgence in coronavirus infections in India has hit local demand and dampened market sentiment. It has caused refineries there to reduce run rates and slow crude purchases in the market. Another reason behind the latest rise in crude oil prices was the release of a report from the American Petroleum Institute (API). The report suggested that U.S. crude supplies fell by 7.7 million barrels for the week ended April 30. The traders were pricing in a 3.9 million barrel drawdown in the report, but the figure surpassed the expectations and pushed WTI crude oil prices higher on Tuesday.
WTI Crude Oil Daily Technical levels
Pivot point: 65.60
WTI crude oil is trading slightly bullish, holding a tight trading range of 66.55 – 63.08 level. The technical indicators suggest a strong bullish bias, as the MACD and RSI are tossing above mid-levels, indicating a bullish bias among investors. On the higher side, a bullish breakout of 66.55 levels can drive buying trends until 67 levels. At the same time, the violation of 63 support can lead the WTI price lower towards 62 and even 60. Let’s keep an eye on 64 levels today, as selling can be seen below this and buying above the same level. Good luck!