WTI advances further and tests the $40.00 mark/bbl

• Prices of the WTI move further north of the $40.00 mark.
• Better mood around riskier assets lift the sentiment in crude oil.
• The API will publish its weekly report later on Tuesday.

The barrel of West Texas Intermediate is adding to Monday’s gains and advances above the key $40.00 barrier per barrel on turnaround Tuesday.

WTI looks to Powell, API

Prices of the American reference for the sweet light crude oil extend the recovery from recent lows and manage to regain multi-day highs in the area above the key $40.00 mark per barrel on Tuesday.

However, the ongoing recovery faces potential headwinds, as traders remain concerned over the prospects of weak demand amidst the unremitting advance of the coronavirus pandemic and its impact on global growth.

Another driver limiting the upside in prices comes from the probability that the OPEC could start unwinding production cuts starting as soon as in January 2021. This view seems to be losing momentum, however, on rising prospects of weak demand.

Moving forward, the API will publish its weekly report on US crude oil inventories ahead of the EIA’s report on Wednesday and the oil rig count by driller Baker Hughes on Friday.

Also of note will be the speech by Fed’s Powell at the NABE event later in the NA session.

WTI significant levels

At the moment the barrel of WTI is up 3.08% at $40.56 and faces the next hurdle at $41.46 (weekly high Sep.18) seconded by $43.75 (monthly high Aug.26) and finally $48.64 (monthly high Mar.3). On the other hand, a breach of $38.93 (200-day SMA) would expose $36.66 (monthly low Oct.2) and then $36.15 (monthly low Sep.8).