Crude oil prices corrected from recent high of $67.98 yesterday and currently holding the grounds near $65.39 on profit booking after a big rally from recent lows of $59.24 as on Mar. 32021.
Increased Chinese demand for crude is supportive for prices after Chinese trade data showed China Jan-Feb crude exports climbed to 11.13 million bpd, up +22% from December and the most since September.
Crude oil prices have ongoing support from recent OPEC+ meeting on Mar. 4 2021. OPEC members have decided that they would be sticking with the output cuts that have buoyed the market so far this year. Also Saudi Arabia’s pledge to extend a unilateral 1 million barrel-a-day cut through at least April.
On the supply side, crude oil production for OPEC members in February fell 920,000 bpd to a 4-month low of 24.870 million bpd. However, Iraq February crude exports, excluding Kurdistan, rose +3.1% m/m to 2.96 million bpd. Meanwhile, Libya will export 1.21 million bpd of crude and condensate this month, the most since October when Libya resumed oil production, according to reporting by Bloomberg.
On economic data front, US February nonfarm payrolls rose +379,000, against expectations of +200,000, Also, the US February unemployment rate unexpectedly fell -0.1 to an 11-month low of 6.2%. Economic data indicates stronger labor market which is likely to be supportive of energy demand. German January factory orders rose +1.4% m/m, stronger than expectations of +0.5% m/m.
Baker Hughes reported on Friday that active US oil rigs rose by +1 rig in the week ended Mar. 5 to a 10-month high of 310 rigs, well above August's 15-year low of 172 rigs.
WTI crude oil prices are likely to trade firm, it may find strong support base around $63.87 and $60.35 per barrel while key resistance levels are seen around $67.20-$68.90 per barrel level.