WTI Crude Oil Takes Out the $70.00 Handle - Forex News by FX Leaders
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WTI Crude Oil Takes Out the $70.00 Handle

Posted Thursday, June 10, 2021 by
Shain Vernier • 2 min read

2021 has been a big year for WTI crude oil and we’re not even at the halfway point. At press time, CME July 2021 WTI crude futures are trading in the vicinity of $70.25 on bullish sentiment. Bidders have stepped into the market above $70.00 due to dwindling supplies and increased demand. If you factor in the slumping U.S. dollar, then the sky’s the limit for WTI in 2021.

In reality, there is a vast array of factors that can influence the pricing of crude oil. Wars, monetary policy, and pandemics are three that come to mind. At the end of the day, the global oil complex looks to the traditional supply and demand curve for pricing answers. Right now, here’s the supply/demand situation:

  • Supply: According to this week’s figures from the API and EIA, U.S. supplies are shrinking rapidly. For the period, the API reported a -2.108 million barrel draw and the EIA showed a -5.241 million barrel decrease. The EIA’s number is directly related to its Gasoline Inventories (+7.046 million barrels) and Refinery Utilization (+2.6%) reports, which were both up big week-over-week. These stats are indicative of growing consumption stemming from the Northern Hemisphere’s summer season.
  • Demand: The coming 90 days are the peak demand period for crude oil and refined fuels. Also, it’s important to factor in the U.S. COVID-19 reopening, which is further spiking travel and fuel demand. 

For July WTI crude oil, prices are trading at five-year highs. An extreme bullish bias is warranted as bidders are piling into this market en masse.

WTI Crude Oil Eclipses $70.00

Since the election of Joe Biden as the 46th POTUS, the price of crude oil has been on a freight train north. Now, the “green” policies of the new Biden administration are being felt throughout the energy markets. Currently, the U.S. national average for a gallon of unleaded gasoline is $3.07. This figure is up from $2.07 one year ago at this time.

USOIL

Overview: As we head toward the July 4th holiday, there’s no telling how high crude oil prices can go. However, if we see the Fed shift its tone at next week’s meeting, then the overtly bullish sentiment is likely to be at least temporarily checked. No matter what the Fed does, get ready for WTI to test $75.00 sooner rather than later.

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