WTI bulls test bearish commitments at critical weekly counter-trendline
- WTI is unchanged following API headline draw.
- WTI had shot up to test the weekly counter-trendline.
The price of a barrel of US crude oil advanced again on Tuesday. West Texas Intermediate spot was trading at $67.64 by the closing bell on Wall Street, up 3.32% on the day following a rally from $65.44 to a high of $67.78.
Global risk appetite has come roaring back, being soaked up by the commodity complex.
The MSCI world equity index, IACWI, which tracks shares in 50 countries, rose another 0.54% following a 1.1% gain at the start of the week, leaving it on course to recovery towards fresh bull cycle highs.
Investors in the US have cheered news that the US Food and Drug Administration had granted full approval to the COVID-19 vaccine developed by Pfizer and BioNTech.
This is expected to accelerate inoculations in the United States.
Additionally, investors are regarding the slowdown of the spread of the coronavirus as an apex to the global pandemic, at least in nations that matter to markets, such as the US and China.
Also supporting oil prices locally, a fire on an oil platform off Mexico on Sunday has cut state-run Pemex's oil production by about 25% since then. This has halted 421,000 barrels per day of production and the market braces for disruption of supplies from Mexico.
Meanwhile, in recent trade, US API weekly crude stocks were released with a headline draw as follows:
- Crude -1.622MM, Exp. -2.367MM.
- Distillates -0.245MM.
- Gasoline -0.985MM.
- Cushing -0.5MM.
WTI technical analysis
The price has rallied into a weekly counter-trendline that would be expected to curtail the current rally.
In doing so, it could leave the price trapped either above and between structures or see a reversion to the mean near 65.65.
A break there will expose the downside once again.
However, a break of all near term daily and weekly resistance structures will leave scope for a continuation towards July's highs near 77.00