WTI stuck in range near $ 68, eyes US GDP, rigs data

• Broad USD strength, bearish EIA report continue to weigh down.
• Focus shifts to US rigs, GDP data for fresh trading impetus.

WTI (oil futures on NYMEX) extends its week-long upside consolidation phase near multi-year tops and remains on track to post the third straight weekly gain.

The barrel of WTI remains on the offers below the $ 68 mark, having failed to sustain above the last amid renewed USD buying across the board. A stronger US dollar makes the USD-sensitive oil more expensive for the holders in foreign currencies and vice-versa.

Moreover, increased nervousness ahead of the US Q1 GDP data drilling sector activity report and, also weighs down on oil, especially after last week’s rise in the rigs count and Wednesday’s EIA crude stockpiles build. The US crude inventories rose by 2.2 million barrels in the week to April 20, to 429.74 million barrels, the EIA data showed.

However, the losses still remain capped amid looming geopolitical tensions between the US and Iran, with markets expecting the US to re-impose sanctions against Iran over the nuclear deal row. Further, concerns about market tightness amid declining output in Venezuela also helps keep the downside cushioned.

WTI Technical Levels

According to Peter Rosenstreich, Swissquote Bank’s Head of Market Strategy, “The bullish pattern started in November 2017 is maintained. Hourly support at 63.20 (10/04/2018 low) is distanced. The technical structure suggests short-term downward moves.”

“In the long-term, crude oil has recovered after its sharp decline last year. However, we consider that further weakness is very likely. For the time being, the pair lies in an upside trend since June 2017. Support lies at 42.20 (16/11/2016) while resistance is located at 77.83 (20/11/2014). Crude oil is trading largely above its 200 DMA,” Peter adds.