WTI consolidates gains below $ 66.50
- Firmer DXY, rising US output weighs.
- Will it keep the $ 66 mark?
Having witnessed a volatile session last Friday, WTI (oil futures on NYMEX) trades modestly flat so far this Monday, as attention now turns towards the fresh US crude supplies report due on the cards in the week ahead.
The barrel of WTI moved-continues to meet fresh supply near the midpoint of the 66 handle, as a rise in the US rigs continue to indicate rising US oil production levels. The US energy companies added 12 oil rigs drilling for new production last week, taking the total to 759.
Moreover, a rebound staged by the US dollar against its main competitors also keeps the upside capped in the USD-sensitive oil. A stronger dollar makes the USD-denominated oil more expensive to the foreign buyers.
However, from a broad perspective, the sentiment remains underpinned by the OPEC-Russia oil output cuts deal extension and healthy global economic growth outlook. Further, in light of better global growth prospects, J.P Morgan increased its 2018 average price forecast by $10 per barrel to $70 per barrel for Brent and by $10.70 per barrel for WTI to $65.63.
At the time of writing, WTI trades modestly flat at $66.20 while Brent drops -0.40% to $69.85.
WTI Technical Levels
The resistances are aligned at $66.66 (3-year tops) ahead of $67 (natural resistance) and $ 67.50 (psychological levels). On the downside, supports are located at $65.94 (5-DMA), $64.84 (10-DMA) and $64.34 (Jan 24 low).