WTI headed to $ 61 mark as stronger USD weighs

• Risk-off boosts the US dollar at the expense of WTI.
• Recovery capped by Bearish US EIA crude stockpiles report.

WTI (oil futures on NYMEX) broke its bearish consolidation to the downside and hit fresh weekly lows at $ 61.27 last hour, as the recovery attempts continue to run into resistances located near $ 61.85 region.

The renewed weakness seen in the black gold can be mainly attributed to a fresh round of the USD buying across the board, as markets turn to the greenback amid risk-averse market condition and ahead of the much-awaited Fed Powell’s speech. The USD index prints fresh seven-week tops at 90.74, up +0.10% on the day.

Meanwhile, the barrel of WTI remains undermined by increasing US output levels, especially after the EIA data showed that the US crude oil production rose to a record 10.057 million barrels per day (bpd) in November and retreated slightly in December to 9.949 million bpd. Further, the EIA report revealed the US crude inventories rose by 3 million barrels last week, much more than the consensus forecasts.

Looking ahead, oil prices will continue to get influenced by the USD price-action and risk sentiment, as traders gear up for a fresh batch of the US economic news for fresh trading impetus on the USD-sensitive oil.

WTI Technical Levels

At $ 61.36, the resistances are aligned at $61.85 (daily top) and $62 (round number) and $62.57 (10-DMA). On the downside, the supports are located at $61 (psychological levels), $60.30 (100-DMA) and $60.10 (classic S2/ Fib S3).