Oil futures on NYMEX are seen fluctuating between gains and losses, now attempting gains once again, despite resurgent USD demand across the board.
The black gold looks to extend its bullish momentum into the second straight session on Monday, as sentiment remains underpinned by looming concerns over supply disruptions, following reports of the US imposing new sanctions on Iran.
Moreover, latest CFTC report that revealed that the investors raised their net long US crude futures and options positions in the week to Jan. 31 to a record 412,380 lots, also offered support to the oil bulls.
However, gains may remain capped amid rising US drilling activity and on expectations of a slowdown in the Chinese oil imports. According to Friday’s Baker Hughes data, 17 oil rigs were added in the week to Feb. 3, bringing the total up to 583, the most since October 2015.
Attention now shifts towards the weekly crude supplies reports from the US due later this week, which will provide next direction in oil.
WTI technical levels
A break above $ 54.50 (psychological levels) could yield a test of $ 55.24 (Jan highs). While a breach of support at $ 53 (round figure) would expose the Feb 1 low of $ 52.64.
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