West Texas Intermediate demand is expected to continue
As the West Texas Intermediate (WTI) momentum (demand) has slowly increased last week, while elsewhere, U.S. leaders have eventually reached a tentative debt ceiling deal.
On Saturday, U.S. President Joe Biden and House Speaker Kevin McCarthy finally agreed to suspend the $31.4 trillion debt ceiling and cap government spending for the next two years.
Both leaders expressed confidence on Sunday that members of the Democratic and Republican parties will vote to support the deal.
Meanwhile, prices gained earlier in the week after Saudi energy minister Abdulaziz bin Salman warned short-sellers betting that oil prices will fall to "watch out" for pain.
Bin Salman's warning was seen as a signal that the Organization of Petroleum Exporting Countries (OPEC) and its allies, including Russia (OPEC+), may further cut output when they meet on June 4.
This week, besides the U.S. job data, investors will be watching for manufacturing and services data out of China for signals on economic growth and oil demand.
Also, energy services firm Baker Hughes Co said in its weekly report on Friday that the number of oil rigs operating fell by five to 570 last week to their lowest since May 2022.
Based on the technical assessment, the Relative Strength Index (RSI) 3-day ‘lookback’ indicator is positive.
The Moving Average Convergence Divergence (MACD) oscillator holds a positive signal, and the ADX (trend) indicator supports a ranging market.
As the renewed advances pressure, the area of $74.30, a clearance here would initiate a short-squeeze to $76.00. Reassess from there.
Viewing any pullback views demand from the bottom of the range and key support at $71.85.
The bullish foundation is seen beneath at $69.45-55.
From here (if challenged), expects a bullish comeback/correction.
Daily chart West Texas Intermediate (WTI)
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