WTI ticks higher on strong Chinese demand

Oil futures on NYMEX stalled its overnight corrective slide and regained poise in Europe, as markets cheer upbeat demand forecasts for the commodity from China.

Oil: Focus shifts to OPEC Jan 22 meeting

Currently WTI trades +0.46% to fresh session highs of $ 52.53, now aiming for a test of $ 53 mark. Oil prices resume its bullish momentum as sentiment remains underpinned amid reports of amid a dozen of headlines from the Iraqi oil minister and OPEC’s secretary general Barkindo, both sounding optimistic on compliance of the OPEC output cut deal.

Moreover, stronger demand outlook from the world’s second largest oil consumer, China, amid reports that total crude demand will hit a record 594 million tonnes this year, also provided extra legs to the upbeat tone around oil.

However, it remains to be seen whether the black gold can sustain gains, in wake of a surprise build in the US crude stockpiles, as reflected by yesterday’s EIA inventory report. The EIA data showed that implied ongoing oversupply as crude stocks unexpectedly rose by 4.1 million barrels to 483.11 million barrels.

WTI technical levels

A break above $ 53 (round figure) could yield a test of Jan 9 high of 53.83. While a breach of support at $ 52 (key support) would expose the multi-week lows of $50.71.