WTI sits near mid-2015 highs ahead of EIA data

• $ 60 mark – a tough nut to crack.
• Buoyed by bullish API report & weaker DXY.
• Eyes on EIA US crude supplies data.

 WTI (oil futures on NYMEX) extends its consolidative mode near 2-1/2 year tops into a second day today, as the bulls eagerly await the EIA US crude inventories data for a decisive break above the $ 60 mark.

WTI: Supported near daily pivot of $ 59.60

The barrel of WTI reversed yesterday’s brief corrective slide, as the bulls are back in control amid expectations of tighter oil markets in 2018 and strengthening Chinese crude demand.

The latest leg higher in the black gold can be attributed to the strong import quotas released by China for 2018, which suggested the world’s second-largest oil consumer will resort to another record buying next year.

Xinhua reported earlier today, China witnessed a 3% monthly drawdown in its crude inventories in November, to 26.15 million tonnes, the lowest level in seven years.

Moreover, the ongoing broad-based weakness in the US dollar also remains supportive of the USD-sensitive oil. Also, a large drop seen in the US crude stockpiles data as released by the API also buoys the sentiment around oil. The API report showed that the US crude oil inventories fell by 6 million barrels in the week to December 22 to 432.8 million.

Furthermore, the commodity has also derived support from the pipeline outages in Libya and the North Sea. Around 550,000 barrels per day (bpd) in oil supplies were disrupted from the Libyan and the North Sea pipeline outage.

Markets now await the official US government crude inventory data due to be published by the EIA for the next direction in oil prices. At the time of writing, WTI rises +0.22% to $ 59.7 while Brent gains +0.32% to $ 66.17.

WTI Technical Levels

The resistances are aligned at $60.1 (2-1/2 year tops) ahead of $60.50 (psychological levels) and $61.82 (June 2015 tops). On the downside, supports are located at $59.27 (5-DMA), $58.48 (10-DMA) and $57.88 (Dec 22 low).