WTI stages a solid comeback from three-month lows, recaptures the $64 mark

• WTI stages a solid comeback from the lowest levels since late May.
• Broad USD weakness saves the day for the WTI bulls.
• Delta covid variant concerns remain a threat to the recovery.

WTI (futures on NYMEX) is on a steady recovery from three-month lows, as the bulls recapture the $64 mark, snapping a week-long losing streak this Monday.

The solid comeback in the US oil can be mainly attributed to the oversold conditions on the daily sticks as well as to a broadly weaker US dollar amid a risk-on market profile.

At the time of writing, WTI is higher by 3% on the day, trading at $64.11, recovering a part of the previous week’s 9% loss.

The global stocks started out a fresh week on the right footing, brushing aside last week’s sell-off induced by the concerns over the impact of Delta covid variant on the global economic growth.

The return of risk appetite is boding well for the higher-yielding oil while diminishing the US dollar’s safe-haven appeal. The US dollar index is down nearly 30% so far, making the USD-denominated oil cheaper for foreign buyers.

Looking ahead, it remains to be seen if the US oil can sustain the recovery momentum, in light of the looming risks from the covid spread and its implications for the oil demand prospects.

The US Markit Preliminary Manufacturing and Services PMIs could be watched for fresh dollar trades and the sentiment on Wall Street, which may eventually impact the oil-price action.

WTI technical levels