WTI bulls cheer risk-on mood, OPEC+ hopes at 13-day high around $74.50, China PMI, inflation eyed

• WTI crude oil grinds higher at two-week top as hopes of more energy demand joins supply crunch talks.
• OPEC+ is likely to continue with existing output cut policy in next week.
• Receding fears of banking crisis, softer US Dollar allow Oil buyers to keep the reins.
• China NBS Manufacturing PMI, inflation clues from Eurozone, US will be the key for clear directions.

WTI crude oil price remains firmer at the highest levels in more than two weeks as bulls flirt with the $74.50 level ahead of China’s official PMIs for March during early Friday. In doing so, the black gold cheers the market’s optimism and the broad US Dollar to brace for the biggest weekly gains since early February.

US Dollar Index (DXY) eyes three-week losing streak as hawkish Federal Reserve (Fed) comments fail to gain support from second-tier data and raise expectations of only limited rate hike options available to the policymakers. That said, Apart from Federal Reserve Chairman Jerome Powell, three Fed Officials backed further rate hikes on Thursday to tame the inflation woes.

Apart from the Fed concerns, hopes of sound banking system also favored the WTI bulls as Apart from Federal Reserve Chairman Jerome Powell, three Fed Officials backed further rate hikes on Thursday to tame the inflation woes.

US Treasury Secretary Janet Yellen said on Thursday, “Banking system is sound, even as it has come under pressure.”

Elsewhere, China’s hopes of upbeat march and talks of no change in the production policies of the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, known collectively as OPEC+, seem to have favored the commodity bulls. “OPEC+ is likely to stick to its existing deal to cut oil output at a meeting on Monday, five delegates from the producer group told Reuters, after oil prices recovered following a drop to 15-month lows,” said Reuters.

Although the Oil bulls are in the driver’s seat, the price reaches the short-term key resistance and hence upbeat prints of China’s official PMIs for March becomes necessary for the quote to remain firmer. It should be noted that the higher inflation figures can back the latest hawkish rhetoric among the major central bank officials and could challenge the WTI buyers.

Technical analysis

A clear upside break of the previous support line from early December 2022, around $74.50 by the press time, becomes necessary for the WTI crude oil bulls to witness further upside. Otherwise, a pullback towards February’s low near $72.50 can be expected