WTI sees choppy trade around $82.00 level, but positive bias remains intact
- Crude oil has been choppy but trades with a positive bias around $82.00.
- A few positives have been attributed as supporting prices on Monday, though US intervention remains a risk.
Crude oil prices have been choppy in recent trade but continue to trade with a positive bias on the day. Front-month futures contracts for the American benchmark for sweet light crude oil, called West Texas Intermediary or WTI, currently trades close to $82.00/barrel, having swung between the $81.30-$82.60 at various points throughout the session. At present, WTI currently trades with on-the-day gains of about 60 cents or a little under 1.0%. To the upside, the next notable area of resistance is last Thursday’s high in the $83.30s, while, to the downside, the next notable area of support is last week’s low at around $78.30.
Market commentators have suggested a few factors as supportive for crude oil prices at the start of the week, including; 1) the passage of the $550B US infrastructure investment package at the end of last week (which improves the US growth and oil demand outlook), 2) news over the weekend that the Saudi Arabian’s had upped their Official Selling Price (OSP), which indicates strong demand, 3) better-than-expected Chinese export growth figures over the weekend, which suggest strong global demand ahead of the winter holiday’s and an easing of supply chain woes and 4) further signs that global jet fuel demand is set to rebound back to pre-pandemic levels as countries reduce travel restrictions (from 8 November, the US is allowing fully vaccinated travels to visit quarantine free from the EU, UK, China, India, Brazil and more and travel booking are reportedly rising).
One downside risk to prices this week is a potential announcement from the Biden administration of measures aimed at addressing high gasoline and heating costs. Reportedly, the US Energy Secretary is currently weighing up options and President Joe Biden could make an announcement as soon as the end of the week. Touted actions include tapping the strategic petroleum reserve, which is supposed to be only be used in emergency situations, and placing a ban on energy exports.