WTI rebounds from weekly low, gains more than 4% amid US sanctions, demand woes
- WTI crude oil recovers sharply after hitting a three-month low.
- Profit booking by traders also plays a role in WTI's recovery from its recent plunge.
- The US Baker Hughes rig count indicates an increase in oil rigs, suggesting a rise in production, but doesn't dampen the oil price rally.
- Reports of Saudi Arabia considering extending crude production cuts into spring add further support to oil prices.
West Texas Intermediate (WTI), the US crude Oil benchmark, climbs after reaching a three-month low of $72.22, rising more than 4% in the mid-North American session. Sanctions from the US on Russian Oil shippers, alongside traders booking profits, lent a lifeline to WTI, trading at $75.97 per barrel and gaining 4.27%.
US sacntions on Russian Oil and Saudi production cuts, propel WTI rises, despite overall EU's and Japan economic weakness
On Thursday, the US Treasury Department imposed sanctions on companies and vessels for shipping Oil above the G7’s $60 price cap to slash Russian profits for its war in Ukraine. Besides that, a jump in US crude Oil stockpiles sponsored WTI’s plunge from weekly highs at around $79.90.
In the meantime, the latest US Baker Hughes rig count for November 17 hit 618, exceeding last week’s 616, witnessing a jump in Oil rigs from 494 to 500. Although it suggests production is augmenting, it failed to weigh on the WTI price.
Oil prices gathered some steam as newswires revealed Saudi Arabia is preparing to prolong crude reductions into spring after price hit a four-month low, according to the Financial Times.
On the bearish front, WTI traders should be aware of the ongoing Eurozone (EU) slowdown, as well as the latest Japan’s Q3 contraction.
WTI Price Analysis: Technical outlook
The US crude Oil benchmark downtrend remains in place, but a looming ‘bullish harami’ two candlestick patterns, or also called an ‘inside day,’ could pave the way for an upward correction. If WTI buyers achieve a daily close above $71.96, the latest cycle low, that could open the door to challenge the 20-day moving average (DMA) at $79.98.
On its way toward the latter, WTI would face key resistance levels like the $78.00 figure, followed by the November 14 swing high at $79.72.