WTI bounces back above $72 mark ahead of OPEC monthly report

• WTI rebounds amid the US dollar’s decline, ahead of OPEC monthly report.  
• A likely OPEC+ deal, falling US crude supplies weigh on oil prices.
• Covid concerns and China growth slowing keep risk traders unnerved.

WTI (futures on Nymex) is attempting a solid rebound from near the $71.70 region, as it regains the $72 mark, helped by the renewed weakness in the US dollar across the board.

Profit-taking after the recent sell-off cannot be ruled out ahead of the key OPEC monthly report, which is expected to include the cartel’s outlook on the oil market for 2022.

The black gold tumbled nearly 2% on Wednesday on heightened expectations of tighter supplies following a Reuters report that Saudi Arabia and the United Arab Emirates (UAE) have reached a compromise deal in a standoff over OPEC and its allies (OPEC+) crude output hike.

Meanwhile, the Energy Information Administration (EIA) reported that the US crude stockpiles fell for the eighth straight week last week, exacerbating the pain in WTI price. Crude stockpiles dropped 7.897 million barrels last week vs. expectations for a draw of 4.359 million barrels, the EIA reported a day before.         

Despite the rebound, the US oil remains vulnerable amid the rapid spread of the Delta covid strain globally and concerns over slowing growth in China – the world’s second-biggest oil consumer. The risk-off market mood is likely to keep the upside attempts limited in the higher-yielding oil.

Next of relevance for oil traders remain the OPEC monthly report and the sentiment on Wall Street. Also, Fed Chair Jerome Powell appears again to testify on the Monetary Policy Report, impacting the dollar’s price action.

WTI technical levels to consider