WTI attempts gains above $ 50.50 amid renewed optimism

Oil futures on NYMEX regained the bids last hours and now looks to extend last week’s rally beyond $ 51 levels, as broad based USD correction combined with better economic prospects in Asia and Europe helps underpin sentiment around oil markets.

The economic sentiment in both continents remains buoyed, in the wake of upbeat factories data released earlier on the day, which suggests increased demand for the black gold.

However, the four-day rally may run out of legs amid persisting concerns that a higher US rig count could re-ignite global oversupply worries. 

Looking ahead, the USD dynamics will have a significant impact on USD-sensitive oil ahead of the Fed minutes and NFP data due later in the week ahead. Meanwhile, the US crude reserves data will hog the limelight in the first half of this week.

WTI technical levels        

A break above $ 50.84/51 (Mar 3 high/ key resistance) could yield a test of $ 51.35 (50-DMA) beyond which $ 52 (100-DMA) could be tested. While a breach of support at 5-DMA of $ 50.33 would expose 200-DMA support of $ 49.51, below which downside opens up for a test of $ 48.75 (20-DMA).