WTI: Buyers attack $58.00 as US stimulus hopes back energy optimists, API in focus

WTI stays strong near January 2020 highs while extending recent bounce off $57.59.
Saudi Arabia’s extra supply cut from February gets active, chatters of eroding supply glut gain momentum.
American stimulus hopes, US dollar weakness add strength to the commodities.
API inventories, risk catalysts become the key catalysts to watch.

WTI bulls dominate near $58.00, highest since January 2020, amid the initial Asian session on Tuesday. In doing so, the energy benchmark rises for the seventh consecutive day amid hopes of recovery in global energy demand as well as fears of the supply cut.

Considering Saudi Arabia’s earlier pledge to cut down on its output during February and March, the global oil supplies are likely to be limited during these months. As a result, the rumors over a reduction in the supply glut gains momentum.

On the other side, global vaccinations and pick-up in economic activities seem to have favored the energy demand.

Additionally, increasing odds of US President Joe Biden’s $1.9 trillion covid relief stimulus as well as the Tehran-Washington tussle over the 2015 nuclear accord also help the commodity.

It’s worth mentioning that the US dollar weakness adds cherry to the black gold’s run-up. That said, the US dollar index (DXY) eased from the two-month high and dropped for the second consecutive day on Monday.

Looking forward, private oil inventory data from the American Petroleum Institute (API), prior -4.261M, will be the key. Though, energy traders shouldn’t ignore updates from the US-Iran story and American stimulus for fresh impulse.