WTI crude oil looks to regain $70.00 amid China-inspired optimism, softer US Dollar

• WTI crude oil grinds near intraday high after two indecisive daily performances.
• PBoC moves, Asian lobbyist’s favor to Chinese companies and Dollar selling from Beijing favor sentiment and commodities.
• Russia-inflicted supply crunch woes add strength to energy prices.
• API crude oil inventories, US Durable Goods Orders and CB Consumer Confidence will be important to watch for clear directions.

WTI crude oil clings to mild gains near $69.80 amid early Tuesday morning in Europe, after portraying the energy market’s indecision in the last two days. In doing so, the black gold cheers the risk-positive headlines from China, as well as the downbeat US Dollar, ahead of the key US data and weekly private oil inventory numbers from the American Petroleum Institute (API).

The People’s Bank of China’s (PBoC) lower-than-expected fixing of the USD/CNY price joined the alleged selling of the US Dollar by the Chinese state banks in the offshore currency markets triggering the latest risk-on mood, as well as weighing on the US Dollar.

Additionally, headlines from Reuters suggesting the Asian lobby group's push for an easing of Chinese companies' overseas listing also underpins the market's latest optimism about China. “China's new offshore listing rules for domestic companies have left bankers and lawyers who work on listings unsure how to take on liabilities and how to avoid breaching tightened confidentially rules, Asia's largest financial lobby group said on Tuesday,” said Reuters. “Lobby group ASIFMA (the Asia Securities Industry and Financial Markets Association) counts leading global investment banks Goldman Sachs, JPMorgan Chase & Co, and UBS Group among more than 170 financial firms who are association members,” added the news.

On the other hand, the easing of the Russia-linked geopolitical concerns, after the Wagner Group drops Moscow’s mutiny and President Vladimir Putin’s appreciation of the mercenary's decision to retreat also underpin the market’s upbeat sentiment and propel the Oil price. However, fears that Moscow may take steps to push back the doubts about its military strength, especially after the latest mutiny attempt, raise fears of an oil supply crunch and put a floor under the energy benchmark’s price.  That said, earlier in the day, the Russian Defense Ministry crossed wires, via Reuters, while confirming tactical flight exercises over the Baltic Sea.

While portraying the mood, S&P500 Futures print the first daily gains in three by bouncing off the lowest levels in eight days, up 0.20% intraday near 4,380 at the latest. That said, the US 10-year and two-year Treasury bond yields remain depressed at around 3.73% and 4.69% by the press time.

Moving forward, US Durable Goods Orders for May, expected -1.0% versus 1.1% prior, as well as the US Conference Board’s (CB) Consumer Confidence for June, expected to arrive at 103.90 versus 102.30 prior, will direct intraday moves of the Oil price. Also important will be the API Weekly Crude Oil Stock, prior -1.246M, for the period ended on June 23.

Technical analysis

Doji candlesticks in the last two days portray the Oil traders’ indecision. As a result, the commodity is likely to remain sidelined between the convergence of the 21-DMA and 10-DMA, around $70.40-45, and the horizontal support zone comprising lows marked since May 31, close to $67.00.