WTI holds to gains above $77.80 on China demand despite buoyant USD

• Western Texas Intermediate advanced 0.21%, despite overall US dollar demand.
• WTI was bolstered by China’s re-opening and dovish remarks from Fed’s Bostic.
• Overall US Dollar strength due to elevated US Treasury bond yields capped WTI’s rally.

Western Texas Intermediate (WTI) clings to minuscule gains after rallying for three consecutive days, up 0.21%. The US crude oil benchmark is almost flat due to US jobs data that lifted UST bond yields above the 4% threshold that underpinned the greenback. However, upbeat data from China kept the black gold from printing losses. At the time of writing, WTI exchanges hands at $77.86 pb.

WTI’s advances on China’s demand and dovish remarks from Fed’s Bostic

China’s activity improved, as shown by Caixin Manufacturing, which rose for the first time in seven months. In the meantime, China’s imports of Russian oil are set to hit a record high in March, as its re-opening increased oil demand, hence the jump in prices.

WTI’s rally was capped in the early morning as the US Bureau of Labor Statistics (BLS) showed that unemployment claims were lower than expected, spurring speculations that the Federal Reserve (Fed) would raise rates above 5.50%

But comments from Atlanta’s Fed President Raphael Bostic, opening the door for the Fed pausing rates sometime this summer, kept WTIs from entering negative territory.

Investors’ worries dented sentiment in the European session, as inflation data for the Eurozone (EU) easied but remained almost four times higher than the 2.00% target imposed on the European Central Bank (ECB).

Fed and ECB to raise rates above initial estimates

Traders’ focus has turned to how high-interest rates in the US and Europe will get. Swaps markets are pricing that the Federal Reserve would peak at 5.5% in September, while other traders expect rates to hit 6%. On the ECB front, rates are expected to go as high as 4% or above.

WTI Technical levels