Crude oil price trading steady above the previous week high on Monday. During the last week, Brent crude oil and WTI gained 6% and 9% respectively.
These are the few reasons why the US crude oil price climbed 9% last week:
- OPEC and its allies reached an agreement to continue with the deeper supply cuts during their latest meeting.
- Saudi Arabia’s promise to implement more supply cuts in February and March. While Russia planning to cut its crude exports by almost 20% to a three-month low this month.
- Renewed hopes for US Biden’s proposed 1.9 trillion stimulus plan after House of Representatives gave final approval to a budget plan that included President Joe Biden’s $1.9 trillion coronavirus relief package.
- Better-than-expected US EIA and API inventory data. According to the EIA, the U.S. produced 100,000 barrels per day less in January 2021 than in December 2021. The last week EIA data showed crude inventories unexpectedly dropped by 994,000 barrels last week to 475.7 million barrels.
- New coronavirus case counts are steadily dropping across the United States after US administering vaccine shots at a faster daily rate than any country in the world.
For this week, the main drivers for the oil prices remain the US stimulus negotiations, US oil inventory report and the movement of the US dollar.
$WTI technical outlook
Technically the overall momentum remained bullish for the US crude oil prices since last Monday. In the short term if the bullish momentum continues the next upside levels to watch $58 and $58.50. On the flip side, the first immediate support can be found at $56.50 and then $56.10. The expected trading range for this week is between 55.00 support and 58.80/59.10 resistance.