WTI prices are expected to be underpinned by a weaker U.S. Dollar and firmer equity prices today. The daily chart indicates we’re likely to see a drive into at least $61.95 to $62.01.
U.S. West Texas Intermediate and international-benchmark Brent crude oil settled mixed on Thursday despite a weaker dollar that hovered near a three-year low. Position-squaring ahead of the start of the Chinese New Year may have also been behind the two-sided trade.
April WTI crude oil settled at $61.17 or +0.66 or -1.09%. April Brent crude oil finished at $64.33, down $0.03 or -0.05%.
Crude oil is set to recover about 4 percent of last week’s 10 percent decline, getting most of its support from a weaker dollar and a rebound in the global equity markets. However, the upside was limited by worries over rising U.S. production.
Crude oil prices are being boosted early Friday by several factors including a further recovery in the U.S. stock market, a weaker U.S. Dollar and below-average volume in the Asian markets ahead of the Chinese New Year.
At 0932 GMT, April WTI crude oil is trading $61.62, up $0.45 or +0.74% and April Brent crude oil is at $64.75, up $0.42 or +0.65%.
Also underpinning the markets is the news that Saudi Arabia and Russia plan to draft an agreement on a long-term alliance by the end of the year, United Arab Emirates energy minister Suhail al-Mazroui said on Thursday.
Additionally, a new report said Asian demand is increasing. India imported a record 4.93 million bpd in January to feed its expanded refining capacity and to meet rising demand.
Earlier in the week, oil prices jumped after Saudi Energy Minister Khalid al-Falih said OPEC hopes to keep limiting crude output to leave the market tight.
Perhaps helping to limit gains was the U.S. Energy Information Administration’s weekly inventories report which showed U.S. crude output hit a record 10.27 million barrels per day, making it a bigger producer than Saudi Arabia.
WTI prices are expected to be underpinned by a weaker U.S. Dollar and firmer equity prices today. The daily chart indicates we’re likely to see a drive into at least $61.95 to $62.01.
The upside target for Brent crude oil is a pair of 50% levels at $65.89 to $66.03.
James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.