WTI faces rejection above $60 mark despite the Suez Canal blockage

• WTI fails to sustain the recovery, drops back below $60
• Suez Canal blockage and risk-on mood fail to entice oil buyers.
• A firmer US dollar caps the upside attempts in the US oil.

Having failed to resist above the $60 level, WTI (futures on NYMEX) fell sharpy to $59.36 before recapturing the $59.50 threshold.

At the press time, the US oil trades at $59.75, higher by 2% on the day. The black gold eyes the third straight weekly loss.   

The WTI barrel caught a fresh bid-wave in the late-American trading on Thursday and staged a solid comeback, courtesy of the fears that the Suez Canal blockage could last for weeks.

A large container ship got stuck between both banks in the Suez Canal, which has led to the suspension of the traffic through the narrow channel linking Europe and Asia. A small percentage of the world’s crude is shipped through the canal.

However, the recovery fizzles out as the US dollar holds firmer near four-month highs across its main peers, in light of increasing expectations of faster US economic recovery. A stronger greenback makes the USD-denominated oil expensive for foreign buyers.

Looking ahead, a slew of US economic data and Baker Hughes oil rigs count data will be eyed for near-term trading opportunities. The updates about the Suez Canal situation could also have some impact on the black gold.

WTI: Technical levels