- WTI attracted some dip-buying on Monday and turned positive for the sixth straight session.
- Expectations for growing fuel demand remained supportive of the ongoing strong bullish run.
WTI crude oil reversed an intraday dip to the $68.80-75 region and inched back closer to the highest level since October 2018 during the early North American session. The commodity was last seen trading around mid-$69.00s, up 0.40% for the day.
Data released on Monday showed that crude oil imports in China – the world’s largest importer – fell 14.6% YoY in May. This comes on the back of last week’s agreement between OPEC and its allies to stick to supply restraints through July. Apart from this, prospects of higher Iranian exports exerted some pressure on the black gold during the first half of the trading action on Monday.
A fresh set of talks between Iran and global powers over a nuclear accord is set to start on Thursday in Vienna. A successful conclusion could include Washington lifting economic sanctions on Iranian oil exports. This could potentially result in 500,000 to 1 million barrels per day of additional crude oil supply re-entering the global market.
The negative factors, to a larger extent, were offset by an upbeat outlook for the world economic recovery and expectation for growing fuel demand during the summer driving season in the US. Adding to this, some improvement in the pandemic situation in India acted as a tailwind and assisted the commodity to attract some dip-buying at lower levels.
The fundamental backdrop supports prospects for additional gains. With technical indicators maintaining their bullish bias and still far from being in the overbought territory, the set-up seems tilted firmly in favour of bullish traders. Hence, a subsequent move to fresh multi-year tops, or levels beyond the key $70.00 psychological mark, looks a distinct possibility.
