WTI climbs on China’s reopening, steadily around $74.80s

• Oil prices trim some of the last week’s 8% losses, up by 1.70%.
• The reopening of China and a softer US Dollar keep WTI advancing, though trading off the $76.69 highs of the day.
• WTI Price Analysis: Break above $75.00 could pave the way toward the 20-day EMA.

Western Texas Intermediate (WTI), the US crude oil benchmark, rose about 2% on Monday following China’s border reopening, which bolstered fuel’s demand outlook amidst recessionary fears looming. At the time of writing, WTI is trading at $74.83 per barrel.

A boost in sentiment spurred by China’s news and a less hawkish US Federal Reserve (Fed) was cheered by oil traders. Consequently, the greenback weakened, as shown by the US Dollar Index dropping 0.81%, down to 103.069.

Although today’s price action suggests WTI prices could resume upward, traders should be aware of last week’s losses of more than 8%, which were the most significant weekly declines since 2016.

Even though China’s opening its borders after three years of being closed was cheered by investors, woes that it could trigger an uptick in Covid-19 cases keep investors refraining from committing to riskier assets.

Meanwhile, US economic inflation expectations unveiled by a New York Fed survey flashed that consumers for one-year-ahead inflation slowed to 5% in December, on its lowest reading since July 2021. However, estimates for the three years were unchanged at 3%, while for a longer term, they edged 0.1% up to 2.4%.

WTI Price Analysis: Technical outlook

From a technical perspective, WTI peaked at around $76.69 per barrel on Monday, failing to crack the 20-day Exponential Moving Average (EMA) at $76.67. Suppose WTI achieves a daily close above January’s 6-daily high of $75.44. In that case, that will keep oil bulls for a resumption of a challenge of the 50-day EMA at $79.35, ahead of testing a three-month-old downslope trendline drawn from November highs of $93.73, which passes around $79.85, ahead of WTI reaching $80.00 a barrel.