WTI retreats from two-month top near $115.00 with eyes on Eurogroup meeting

• WTI pares intraday gains at the highest levels since late March, up for the fourth consecutive day.
• USD weakness, risk-on mood add strength to the bullish bias.
• EU’s likely resistance for new Russian sanctions, OPEC meeting may weigh on prices.

WTI dribbles around a two-month high during the four-day uptrend ahead of Monday’s European session. That said, the energy benchmark eases from the multi-day to $114.80 by the press time.

Despite the latest pullback from the intraday high, the black gold gained around 0.70% on a day as upbeat markets sentiment and a softer US dollar underpin the commodity prices. However, cautious sentiment ahead of today’s Eurogroup meeting seems to challenge the WTI bulls.

That said, the US Dollar Index (DXY) renews its monthly low around 101.40 amid receding bets on the Fed’s aggressive rate hikes, especially after the recent softer inflation and growth numbers from the US.

Other than the softer yields and easing bets on the Fed’s aggression, upbeat headlines from China, suggesting a faster easing of the covid-impressed activity restrictions, also help markets to remain positive, which in turn propel WTI crude oil prices. “Shanghai said on Sunday ‘unreasonable’ curbs on businesses will be removed from June 1, as it looks to lift its COVID-19 lockdown, while Beijing reopened parts of its public transport as well as some malls and other venues as infections stabilized,” said Reuters.

Moving on, the energy buyers will pay attention to the bloc’s meeting and Thursday’s OPEC decision on the oil output. While the early draft, read by Reuters, signaled the bloc’s resistance to more sanctions, the European Union (EU) Foreign Policy Chief Josep Borrell mentioned that they won't fail on the oil embargo in the next sanctions package against Russia. "There will be an agreement in the end, we will have deal on next sanctions package by Monday afternoon,” the policymaker adds.

Technical analysis

WTI crude oil buyers need to cross the late March swing high surrounding $115.90, also stay beyond the $116.00 round figure, to aim for the yearly peak of $126.51. Meanwhile, May 13 top around $113.15 and the $113.00 restricts the immediate downside of the black gold.