- WTI buoyed by hopes of OPEC+ supply cuts on the back of Russia support.
- Risk aversion, rising US oil inventories, and a broadly stronger dollar cap gains.
- Focus on US jobs and oil rig count for new guidance.
West Texas Intermediate crude (NYSE oil futures) is extending its consolidation stage, after recovering from a 13-month low of $49.47, for a second day in a row on Friday, as bulls switch to a cautious stance amid spreading risk aversion due to Fears of the growing Chinese coronavirus spread internationally.
Investors remain concerned about the negative impact of the virus outbreak on global economic growth, which ultimately translates to oil demand growth concerns. Moreover, broad-based strength in the US dollar, in response to strong US economic data, as well as concerns about the rising US oil supply, continues to limit bullish attempts in the black gold.
However, the downside appears to be limited by growing expectations that OPEC and its allies (OPEC+) may extend their production cuts to combat the negative economic impact of the coronavirus, with Russia supporting the OPEC+ recommendation.
Attention now turns to US employment data and the oil rig count released by Baker Hughes, in order to determine the next direction in prices.