WTI bounces back towards $74.50, multi-year highs

• WTI buyers regain poise ahead of the July 1 OPEC+ meeting.
• Delay in a surge in Iranian oil exports amid US-Iran stand-off underpins.
• Economic optimism leads to a rebound in fuel demand.

WTI (futures on Nymex) is back on the $74 mark, reapproaching the level last seen in October 2018 at $74.45, as the bullish undertone in the US oil remains intact amid encouraging fundamental news.

As the US and Iran struggle to revive the nuclear deal talks, the risk of the return of the Iranian oil supply to the market has been delayed, which is rendering positive for the black gold.

Further, improving prospects of the recovery in demand for fuel amid global economic rebound adds to the upbeat outlook on oil. WTI kicked off the week on the right foot, having booked fifth straight weekly rise last week.

The renewed weakness in the US dollar amid uncertainty over the Fed’s tightening plans, in light of weaker-than-expected PCE inflation data, exerts additional upward pressure on oil. A weaker greenback makes the USD-denominated oil cheaper for foreign buyers.

However, it remains to be seen if the WTI price can sustain at multi-year tops, as investors could turn cautious ahead of the July 1 OPEC and its allies (OPEC+) meeting. The alliance is expected to increase the oil production as early as August, as the oil price is on the rise amid brighter prospects of demand recovery.

All eyes now remain on the US weekly crude supply reports due later on Tuesday and Wednesday for fresh trading impetus. The negotiations over US President Joe Biden’s $1.2 trillion infrastructure stimulus plan will be closely followed as well.

WTI technical levels to consider