WTI side-lined below $ 57, rally overdone?
- USD remains weak across the board.
- Bearish EIA crude data weighs.
- Hopes of OPEC cuts deal extension underpin.
Having reversed a knee-jerk spike to $ 57.90 levels, WTI (oil futures on NYMEX) is seen extending its consolidative mode so far this Thursday, as the bulls face exhaustion after the recent run-up to more-than-two-year highs.
WTI: A profit-taking slide?
The black gold brought a halt to its upbeat momentum, as the bulls take a breather before the next push higher. Moreover, markets resort to profit-taking, as they raise doubts that the rally has been overdone.
Meanwhile, the subdued trading seen in oil today, is also on the back of disappointing US crude supplies report, as published by the EIA yesterday. The US crude stockpiles rose 2.2 million barrels in the week to Nov. 3, to 457.14 million barrels, against a decrease of 2.9 million barrels expected.
Moreover, the sentiment also remains undermined on the back of weakening Chinese crude demand, after the Chinese crude oil imports data showed a sharp drop in the month of Octobers. China Oct crude oil imports drop to lowest in more than a year – RTRS
However, the losses appear limited as a broadly weaker US dollar amid the US tax reform uncertainty, keeps the USD-sensitive oil buoyed. A weaker US dollar makes the USD-denominated oil cheaper for the buyers in foreign currencies.
At the time of writing, WTI trades modestly flat at $ 56.76, while Brent steadies at $63.50.
WTI Technical Levels
Higher-side levels: 57.69 (Nov 7 high), $ 57.91 (multi-month highs), $ 58.56 (classic R2/ Fib R3).
Lower-side levels: 56.00 (key support), 55.70 (10-DMA), 55.50 (psychological levels).