WTI climbs to $63.00 mark, recovers a major part of overnight losses

WTI crude oil refreshed daily lows heading into the North American session, with bulls now looking to build on the momentum beyond the $63.00/barrel mark.

The commodity stalled this week's sharp retracement slide from the vicinity of the $67.00 mark, or over two-month tops and staged a solid intraday bounce from one-month lows, around mid-$61.00s. The momentum allowed the black gold to snap three consecutive days of the losing streak and recover a major part of the previous day's losses.

Investors remain optimistic about fuel demand recovery amid the impressive pace of vaccinations in western countries and the gradual reopening of the economies. That said, investors remain worried that the continuous surge in COVID-19 cases in Asia and the imposition of new restrictive measures could hinder the fragile fuel demand recovery.

This comes amid expectations over the return of Iranian crude supplies amid progress on restoring Iran’s nuclear deal. In fact, Iran's president said the US was ready to lift sanctions on the country's oil, banking and shipping sectors. The development should hold bulls from placing aggressive bets and keep a lid on any strong gains.

Even from a technical perspective, the recent breakdown through a two-week-old trading range support, around the $63.00 level favours bearish traders and supports prospects for further losses. Hence, any further move up might still be seen as an opportunity for bearish traders and runs the risk of fizzling out rather quickly.

Technical levels to watch