WTI Crude Oil Returns To The $75.00 Area - Forex News by FX Leaders
crude oil

WTI Crude Oil Returns To The $75.00 Area

Posted Friday, July 9, 2021 by
Shain Vernier • 2 min read

WTI crude oil is back in the green, with August futures rallying more than 2.0% on the session. Prices are now on the doorstep of the key $75.00 handle and resuming 2021’s bullish action. However, there is a significant volume split developing between the August and September contracts. Currently, volumes of August WTI are trading at a 2.7/1 ratio over the September issue. This is important to recognize because near-50/50 volume dilution may arrive as soon as Monday or Tuesday.

One other observation concerning the August/September contracts ― the spread is quite large. At press time, August WTI futures are trading at $74.53 and September WTI is trading $73.77; a spread of $0.76. The $0.76 spread is noteworthy as it looks as though energy traders are already pricing the end of summertime peak demand.

During the midweek, an apparent rift between OPEC+ nations sent WTI prices from a high near $77.00 to a proximity test of $70.00. However, this week’s inventory stats were exceedingly negative, led by a -6.866 million barrel drop in the EIA stocks figure. Since yesterday’s EIA report, WTI crude oil has been back on the bull, rallying more than 3%. Right now, it’s all about lagging supply, increased demand, and inflation.

Ignore OPEC+ ― WTI Crude Oil Is Still Bullish

With summertime pricing in full swing, it’s tough to make a bearish case for WTI crude oil. The long-term uptrend is intact and the OPEC-induced selloff appears over. Also, inventories continue to decrease as demand is returning to pre-pandemic levels. Make no mistake ― a heavy bullish bias toward WTI is warranted. 

USOIL

Overview: Looking forward, WTI crude oil is poised to rise precipitously ahead of this month’s FOMC Meeting. Really, the only things that can derail the ongoing oil rally are a dramatic shift in Fed policy or widespread Delta variant lockdowns. As soon as central banks begin to tighten policy, global energy prices will be due to contract. However, barring a major surprise from Jerome Powell and the FOMC, a more hawkish discussion isn’t likely to begin until Q2 2022.

Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
Related Articles
Comments
0 0 vote
Article Rating
Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments