WTI: Buyers again aim for $60.00 amid supply crunch scenario

• Energy buyers gave little importance to Trump’s tweet amid optimism surrounding the US-China trade deal and challenges for Venezuelan output.
• Russian exit from OPEC+ could hit the bulls to confirm rising wedge and trigger the WTI’s fresh downturn.

WTI trades near $59.50 during early Friday. The energy benchmark earlier dropped on the US President Donald Trump’s tweet pushing OPEC towards supply increase but later on recovered. The recent rally in prices during early Asian session seems to be on the report from Reuters mentioning that the US orders foreign firms to further cut imports from Venezuela. Traders may now concentrate on Baker Hughes US oil rig count together with developments from the Beijing as the US delegates are on a two-day visit to China for trade negotiation.

During late-Thursday the quote slipped to near $58.00 after Trump tweeted that "Very important that OPEC increase the flow of Oil. World Markets are fragile, the price of Oil getting too high.” However, prices gradually recovered afterward as traders might have recollected that the Organization of the Petroleum Exporting Countries (OPEC) has previously ignored Trump’s push for supply boost.

On the supply side, Venezuela is already witnessing difficulties producing and selling its energy products as a power outage at home and stiff sanctions from the US play their role. A recent news report from Reuters signal further hardships for an OPEC member and decline in the cartel’s output as well.

While catalysts concerning Venezuela and likely progress at the US-China trade deal are supporting recent price uplift, doubts over Russia’s part in future OPEC+ supply cuts may weigh on the crude’s upside.

The weekly release of Baker Hughes US oil rig counts seems an important supply indicator for energy traders to watch. There has been a steady downside in the US oil rig counts since the last few weeks, signaling supply cuts. In its recent release, the rig count stat stood at 824 during the week ended on March 22, down from 833 earlier.

WTI Technical Analysis

FXStreet Analyst Ross J Burland expects WTI sellers to take control on rising wedge break. His analysis says:

“WTI Daily chart shows bearish stochastic, rising bearish wedge, 38.2% Fibo target if 58 bear trap support broken, daily cloud support confluence and 1200 point target to $47 handle. On the flipside, bulls can target 61.8% Fibo and 63 handle.”