WTI RISES ON BETTER-THAN-EXPECTED US ECONOMIC DATA
WTI Crude futures are currently trading at $38.89-higher by 2.45% as compared to the previous closing price.
Brent crude futures were trading at $41.32-higher by 2.50% as compared to the previous closing price. The international benchmark fell about 5% in the previous trading session.
Crude prices gained today due to signs of a marginal improvement in the US economy but increasing cases of coronavirus in some states limited gains.
Crude prices rose after data showed that the number of Americans filing claims for unemployment benefits dropped in the week ended 20th June and orders for key capital goods rebounded in the last month.
Other data that support market expectations was that GDP could contract as much as a 40% annualized rate in the second quarter.
New COVID-19 cases have risen in US states including Florida, California, and Texas.
The IMF lowered its economic forecasts on Wednesday. The IMF now expects a decline of 4.9% in global GDP in the current year that has added to market worries of weakened crude demand.
The OPEC and other oil-producing nations agreed to lower supply by 9.7 million barrels per day in April. The deal came into effect from the 1st of May.
The OPEC and its allies earlier this month agreed to extend the record production cut until the end of next month.
Market players are now waiting to see if top producers extend their record supply cut beyond the end of the next month.
U.S. Baker Hughes Oil Rig Count for the current week is scheduled to be released tomorrow at 1 pm ET. The U.S. energy services firm Baker Hughes said in its report on Friday (19th June) that the U.S. energy firms decreased the number of rigs looking for new oil by 10 to 189 for the week ended 19th June.
Adding to supply-side data, reports which are published by the API and the EIA every week, the API reported on Tuesday that U.S. crude supplies rose by 1.749 million barrels for the week ended June 19. The EIA reported on Wednesday that U.S. crude inventories advanced by 1.442 million barrels for the week ended 19th June.
On the technical front, the RSI is currently at 58.22% and suggests that the market can move in the upward direction. The current price is below the MA5. The current price is above the middle line of the Bollinger bands and is heading upwards.
Overall Bias is Positive and short-term trades can be initiated with below mentioned Stop Loss and Profit targets.
Trade Suggestion-Limit Buy At 38.80 Take Profit At 39.42 Stop Loss At 38.50