WTI fades a spike to $ 60.80, still up 2%

• Catches fresh bids in Europe.
• Risk-on trades offset bearish US rigs count data.
• Eyes on the US weekly crude supplies.

WTI (oil futures on NYMEX) stalled the six-day losing streak on Monday, reversing almost 75% of Friday’s sell-off, as the bulls were offered some respite from the recovery in risk appetite as the global equities rebound after the recent unrest.

The sentiment around the black gold was lifted after the markets witnessed a major turnaround in risk condition, as the European equity markets tracked the risk-on rally seen their Asian counterparts. Meanwhile, holiday-thinned light trading combined with broad-based US dollar weakness also collaborated to the renewed upside in oil.

However, markets remain wary whether the commodity will be able to sustain the upmove, in the wake of new additions to the US rigs count and soaring US oil output levels. Baker Hughes energy services said on Friday, the US energy firms added 26 oil rigs last week, boosting the count to 791, the highest since April 2015.

Further, the latest note published by Goldman Sachs could also keep the upside restricted. Goldman Sachs noted, “the drivers of higher oil prices from September until last week — healthy global demand, voluntary/involuntary supply disruptions and US producer discipline — are unlikely to be sustainable.”

All eyes now remain on the US weekly crude inventories data due out later this week for fresh direction on the prices.

WTI Technical Levels

At $ 60.55, the resistances are aligned at $61.93 (50-DMA) ahead of $62.37 (daily pivot) and $63.00 (round figure). On the downside, supports are located at $ 61.26 (5-week low), $60.56 (classic S1/ Fib S2) and $60.00 (key psychological support).