- Greenback decline pleases commodity buyers including WTI.
- Supply crunch, geopolitical tension offer additional strength to the upside momentum.
- Baker Hughes Oil Rig Counts and China trade data awaited for fresh direction.
Despite having fewer fresh catalysts to follow, WTI remains on the bids near 7-week tops as it trades at $60.50 ahead of the Europe market’s open on Friday.
Overall commodity basket run-up on the back of the US Dollar (USD) weakness can be spotted as a reason for the energy benchmark’s latest strength. Adding to the momentum could be the likely UK-Iran tension after the British oil tanker was stopped by Iranian guards in the Persian Gulf. On the background, supply cut extension by the Organization of the Petroleum Exporting Countries (OPEC), Russia and some other non-OPEC oil producers, jointly called as OPEC+, continue to flash output crunch worries.
The USD has recently been under pressure after the US Federal Reserve officials openly favor Fed rate cuts while citing downside risks to the inflation expectations.
Commodities have an inverse relationship with the USD and hence a decline in the greenback can well be witnessed by an uptick in commodity basket.
Against the move is the US-China trade stalemate that raises the doubts over the future energy demand.
Moving on, monthly trade balance data from China and weekly release of the Baker Hughes US Oil Rig Counts will be on the black gold traders’ radar. While China data is expected to portray an improvement in trade balance and may escalate the present oil run-up, further fall in the US oil rig counts from 788 prior can offer an additional reason to the bulls.
Technical Analysis
FXStreet Analyst Ross J Burland spots convergence of daily moving average to cite $57.80 as the key support:
Bulls continue to commit and the price drifts higher on the 60 handle. On the downside, the familiar 20, 50 and 200 Experiential Moving Averages fall in line as potential support around 57.80. Then, below the weekly lows at 56.77, the 52 handle and then the 14th Jan 50.41 lows ahead of the 26th November lows at 49.44 are a target.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD: The hunt for the 0.7000 hurdle
AUD/USD quickly left behind Wednesday’s strong pullback and rose markedly past the 0.6900 barrier on Thursday, boosted by news of fresh stimulus in China as well as renewed weakness in the US Dollar.
EUR/USD refocuses its attention to 1.1200 and above
Rising appetite for the risk-associated assets, the offered stance in the Greenback and Chinese stimulus all contributed to the resurgence of the upside momentum in EUR/USD, which managed to retest the 1.1190 zone on Thursday.
Gold holding at higher ground at around $2,670
Gold breaks to new high of $2,673 on Thursday. Falling interest rates globally, intensifying geopolitical conflicts and heightened Fed easing bets are the main factors.
Ethena Labs launches new UStb stablecoin backed by BlackRock's BUIDL token
Ethena Labs announced on Thursday that it has released a new stablecoin product, UStb. The new stablecoin will be fully collateralized by BlackRock's USD Institutional Digital Liquidity Fund and function similarly to a traditional stablecoin.
RBA widely expected to keep key interest rate unchanged amid persisting price pressures
The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
Five best Forex brokers in 2024
VERIFIED Choosing the best Forex broker in 2024 requires careful consideration of certain essential factors. With the wide array of options available, it is crucial to find a broker that aligns with your trading style, experience level, and financial goals.