WTI bears step in at the hourly confluences in resistance
|- WTI bulls are back in town taking on the 10 and 20 hourly EMAs.
- The US dollar is in the dumps, supporting commodity prices.
The price of oil is flat on the day after trading between a low of $63.97 and a high of $65.72.
The main news stays with the ransomware attack that had forced the shutdown of pipelines supplying around 45% of fuel to the East Coast.
With US authorities now combating the cyberattack, participants are left to operate in the dark.
While this offered an initial bid to the price of energy, crude turned lower on expectations that the US will have to slow its refining activities and boost imports of gasoline.
However, the big unknown is how long the shutdown will last, underrunning the price of refined products.
Gasoline futures jumped early Monday on Nymex before eased back along with oil prices.
Meanwhile, West Texas Intermediate crude for June delivery fell 80 cents, or 1.2%, to $64.10 a barrel on the New York Mercantile Exchange.
In the bigger picture, according to the latest CFTC report, money managers modestly increased their net long WTI crude exposure.
''Crude oil prices continued to be supported by optimistic demand projections and rebalancing fuel inventories in the US, prompting traders to bet that crude will not drift significantly lower,'' analysts at TD Securities said.
''With OPEC+ projecting that oil demand is set to increase by 5.95 million bpd this year along with the cartel's decision to forego a meeting this week and keep producing at previously agreed rates, WTI continues to trade a nudge below $65/bbl,'' the analysts added. ''This suggests that there will likely continue to be a net long extension in anticipation of further supply-demand tightening, once COVID is seen in the rear view mirror.''
As for the greenback, it remains under pressure in the wake of soft jobs data.
DXY is trading at the lowest level since February 25 just above 90 and is on track to test that day’s low near 89.683 which guards the January 6 low around the 89.21 mark.
A lower dollar makes oil, which is priced in US dollars, more attractive to foreign investors.
WTI technical analysis
The price of the black gold has recovered from the lows of the day and is now pressing against the hourly 10 and 20 EMAs, prior lows and the confluence of the 61.8% Fibonacci retracement level following a sharp correction on the hourly time frame.
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