WTI extends bounce back to the $ 38 level ahead of API data and US elections.

• WTI breaks consolidation to the upside amid risk appetite in the European session.
• Russian producers can support the extension of OPEC + production cuts.
• The focus is on API crude stock data and the outcome of the US elections.

The WTI (NYMEX futures) has resumed the previous day’s upside rebound after consolidating during the Asian session on Tuesday, as bulls return along with risk appetite. At the time of writing, WTI is up 1.85% to flirt with five-day highs at $ 37.95.

Risk appetite money flows have accelerated during the European session amid increased odds of a major “blue wave” victory in the US election, paving the way for a broader fiscal stimulus package. Market optimism has driven higher-yielding oil at the expense of the safe-haven US dollar.

Furthermore, the sentiment around black gold also remains supported by prospects for an extension of OPEC + production cuts.

This comes after “Russian oil companies told Energy Intelligence that they might be willing to extend OPEC’s oil production cut deal + if current unfavorable market conditions persist“said Omkar Godbole, an analyst at FXStreet. OPEC and its allies (OPEC +) hold their next meeting later this month.

However, it remains to be seen if price can sustain momentum from recovery from six-month lows of $ 33.65as markets expect weekly US crude stocks to rise by about two million barrels in the week through October 30.

Also, sentiment on Wall Street could weaken as Americans head to the polls later in the day, which could likely limit the rise in WTI prices. A contested election would be a nightmare for the markets.

Credits: Forex Street