WTI consolidates around $78.00, remains on track to post second straight week of gains

West Texas Intermediate (WTI) US Crude Oil prices attract some buying near a technically significant 200-day Simple Moving Average (SMA) during the Asian session on Friday and for now, seem to have snapped a two-day losing streak. The commodity currently trades just above the $78.00/barrel mark, though remains well below a one-month high touched on Wednesday.

Easing inflation in the US should allow the Federal Reserve (Fed) to start cutting interest rates in June, which is anticipated to boost fuel demand in the world's largest Oil consumer. This, along with a modest US Dollar (USD) downtick, which tends to benefit the USD-denominated commodities, acts as a tailwind for the black liquid. Meanwhile, the expected continuation of the OPEC+ production cuts to the end of the second quarter of 2024 points to softer demand outlook. Apart from this, signs of higher supplies keep a lid on any further gains for Crude Oil prices.

In fact, record-high US production and higher output from OPEC signalled that global oil markets may not be as tight as initially expected. Furthermore, a recession in Japan and the UK, along with the darkening economic outlook for the Eurozone economy, points a weak picture for Crude demand. This might hold back traders from placing aggressive bullish bets around Crude Oil prices and continue to cap the upside. Nevertheless, the commodity remains on track to register strong weekly gains, marking the third week of a positive move in the previous four.

From a technical perspective, the recent breakout and acceptance above the very important 200-day SMA favours bullish traders. That said, the commodity's repeated failures to find acceptance above the $79.00/barrel mark warrant some caution before positioning for any further gains amid mixed oscillators on the daily chart.