WTI: A phase of upside consolidation around $ 51 mark

After having reached fresh monthly tops at $ 51.25 earlier in Asia, oil futures on NYMEX have entered a phase of consolidation, as the bulls take a breather and gather pace for the next push higher.

The rally in oil regained momentum last week and now extends its bullish run into a fourth day today, as markets cheer reports of the OPEC and non-OPEC producers considering to deepen and extend an OPEC-led supply cut in a bid to prop up prices.

Reuters reported sources, noting that the option of deepening the production cut was also being discussed ahead of a meeting of OPEC and its allies in Vienna on May 25.

Focus now remains on the developments surrounding the US politics, with Comey’s testimony expected to be one of the key events this week, which could impact the USD dynamics, eventually influencing the USD-sensitive oil. More so, the US crude supplies data will be also closely eyed ahead of the OPEC meeting this Thursday.

WTI technical levels 

A break above $ 51.50 (psychological levels) could yield a test of $ 52.65 (May 19 high) beyond which $ 53 (round number) could be tested. While a breach of $ 50.36/18 (200 & 5-DMA) would expose $ 49.67 (50-DMA), below which downside opens up for a test of $ 49.19 (10-DMA).