WTI remains firmer around $83.50 as bulls poke late 2014 levels

• WTI holds the head high at seven-year top even as bulls recently take a breather.
• EIA inventories, brighter mood and US dollar weakness add to the bullish bias.
• Supply outage, demand forecasts favor upside momentum going forward.

WTI stays on the front foot around $83.50, the highest level since October 2014, during Thursday’s Asian session. The oil benchmark rose during the last two days to refresh the multi-day high.

The latest run-up could be linked to the lower-than-anticipated weekly inventory data from the Energy Information Administration (EIA), as well as US dollar weakness and risk-on mood.

That said, the EIA Crude Oil Stocks Change for the week ended on October 15 dropped below +1.857M forecast and +6.088M prior to -0.431M reading at the latest.

The US Dollar Index (DXY) printed a six-day south-run near the lowest levels in three weeks, pressured around 93.60 by the press time. In doing so, the greenback gauge failed to benefit from the tapering signals from Federal Reserve Governor Randal Quarles and  Cleveland Fed President Loretta Mester as equities rallied on firmer earnings and the Treasury yields also softened after refreshing the multi-day top.

The risk-on mood could be witnessed by strong equities and a pullback in the US Treasury yields, following its run-up to the fresh five-month high. That said, the 10-year Treasury yields around 1.66%, up 2.6 basis points (bps), following the bond yields’ run-up to the five-month high.

It’s worth noting that China’s recent crackdown on energy production and expectations of strong oil demand going forward, as the global economies overcome the pandemic-led activity restrictions, adds to the bullish bias for the WTI crude oil prices.

However, Fed tapering concerns highlight the incoming US data, like today’s US Weekly Jobless Claims and monthly housing figures, for fresh impulse, in addition to the risk catalysts.

Technical analysis

November 2012 low near $84.10 remains on the WTI bull’s radar until the quote stays beyond the year 2018 top of $76.80.