WTI crude oil hovers above $86.00 at eight-year high, Russia, yields and API in focus
- WTI grinds higher around multi-year top during four-day uptrend.
- Sluggish markets test bulls even as Russia-Ukraine tussles, Iraq-Turkey oil pipeline explosion favor further upside.
- Omicron fears battle China’s readiness for more stimulus amid a non-event Asian session.
- Weekly private inventory data, risk catalysts are the key.
WTI crude oil stays on the front foot around the highest levels since October 2014, recently taking rounds to $86.20-30 during Wednesday’s Asian session.
Market’s optimism to overcome the Omicron woes and hopes of further stimulus from China join geo-political risks to keep the oil buyers hopeful. Recently adding to the bullish bias is the US dollar’s refrain from tracking multi-year high yields.
It should, however, be noted that the US policymakers are worried over the price rally and wants to tame the energy boom and are also showing readiness to seek help from the Organization of the Petroleum Exporting Countries (OPEC). “We still have tools at our disposal to deal with rising oil prices and will engage OPEC as needed,” said White House (WH) Spokesperson, per Reuters.
On a price-positive side, Turkish state-owned media Botas reported an oil pipeline explosion and fire that carries around 450kb/d of crude oil from Iraq to Turkey. Furthermore, Russia’s aggression towards Ukraine and Iran’s repeated rejection of the global push towards de-nuclearization are some other favorable factors that favor WTI oil bulls of late.
Read: Russia’s aggression toward Ukraine could escalate into conflict
It’s worth noting that hints of more stimulus from the world’s largest energy consumer, China, also add strength to the oil prices. “China's central bank will roll out more policy measures to stabilize the economy and move ahead of the market curve as downward pressure persists,” People’s Bank of China (PBOC) Vice Governor Liu Guoqiang said on Tuesday per Reuters.
Moving on, the weekly industry inventory figures from the American Petroleum Institute (API), -1.077M prior, will join the US Housing Starts and Building Permits for December to decorate today’s calendar. However, major attention will be given to the risk catalysts.
Technical analysis
Unless dropping back below the 2021 peak of $85.40, WTI crude oil prices are likely to aim for January 2014 low near $91.30. During the run-up, the $90.00 psychological magnet will act as the key hurdle.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
