WTI: Bears attack $ 61 mark on notable USD demand

• Meets fresh supply on USD buying, rising US output.
• Downside opening up towards 100-DMA at $ 60.60.

Having witnessed steep losses a day before, WTI (oil futures on NYMEX) attempted a minor-recovery and looked to stabilize above the $ 61 mark before meeting fresh supply last hours, as the demand for the US dollar picked-up strength amid easing global trade war fears.

The global equities recovered alongside the recovery in risk sentient after the White House announced that Canada and Mexico may be exempted from planned Trump’s tariffs on steel and aluminum, which in turn offered some respite to the US dollar across its main competitors. A stronger greenback makes the USD-denominated oil more expensive for the holders in foreign currencies.

The overnight recovery staged by the black gold was also on the back of a smaller-than-expected build seen in the US crude stock levels, as reported by the EIA on Wednesday. The US crude inventories rose by 2.4 million barrels in the week to March 2, to 425.91 million barrels, less than the 2.7 million barrel increase analysts had forecast.

On Wednesday, Trump’s tariffs induced escalating trade war fears spurred risk-aversion across the financial markets, taking the barrel of WTI in the red zone along with the global stock markets. WTI fell as low as $ 60.59, the weakest in three days before recovering ground to now trade near $ 61.15 levels.

Looking ahead, the prices remain exposed to downside risks, as persisting increase in the US oil output levels continues to dent the investor’s sentiment. The US is expected to surge past 11 million bpd by late 2018, replacing Russia as the world’s top oil producer.

WTI Technicals

At $ 61.11 the resistances are aligned at $ 61.49 (daily pivot), $ 61.84 (5-DMA) and $ 63.83 (10-DMA). On the flipside, the supports are located at $ 60.60 (100-DMA), $ 60 (psychological levels) and $ 59.50 (classic S2/ Fib S3).