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On Monday’s session, WTI and Brent futures were at $61.75 and $64.50 respectively. Crude oil prices are finding support from the ongoing optimism from the distribution of vaccines and the stimulus package. However, rising COVID-19 cases and vaccination challenges are offering resistance to the oil prices.
Crude oil prices on recovery
Crude oil prices are on recovery after a significant plunge on last week’s Thursday. WTI futures had dropped from about $64.79 to a low of ~$58.21.
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Notably, the decline was a corrective pullback that resulted from crude oil prices rising too fast. Those with an interest to trade oil saw 2021 as the year of economic recovery and subsequent rise in global oil demand. The optimism saw WTI surge from $47 at the beginning of the year to $68 in early-March. During the same period, Brent futures rose from around $50.50 to ~$71.43. From this perspective, a corrective pullback was overdue.
On Monday’s session, WTI futures were up by 0.53% at $61.75. Crude oil prices are finding support from the optimism fuelled by the distribution of President Biden’s stimulus package. Besides, most US states’ administrations are easing the coronavirus-related restrictions. This has added to the positive sentiment on rising oil demand. The progress in vaccination has further fuelled optimism among investors.
However, crude oil prices remain under pressure from coronavirus-related challenges. To begin with, covid-19 cases are on the rise in numerous states within the United States. As of Friday, the 7-day average of additional infections was at 54,666. The figure represents a plateau after several weeks of a downtrend.
Similar struggles have resulted in Brent futures consolidating around $64.50. To begin with, several countries in Europe have imposed strict restrictions. This comes as the region experiences the third wave of the disease.
France, Ukraine, and Poland are among the European nations that have had to ramp up lockdown measures. Germany, the largest economy on the continent, may also follow a similar route as it struggles with rising COVID-19 cases. The row between the EU and UK on vaccination supplies has added to doubts on the recovery of global oil demand. The scenario has slowed down the surge of crude oil prices.
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WTI Crude Oil Technical Outlook
WTI, the benchmark for US oil, is currently trading below the 20 and 50-day exponential moving averages. Besides, it is below the upper and middle bands of the Bollinger bands, but above the lower band. However, based on the fundamentals, it is likely that its currently recovery pattern will continue. If it does, the bulls will be targeting the psychological mark of $64 before testing the upper level of $65.
