WTI bounces-off six-week lows at $57.75 ahead of API data
- WTI stalls declines amid expectations of US Crude Stocks draw.
- Receding Mid East tensions, USD strength to cap the bounce.
- Markets look forward to US API data and trade deal signing.
WTI (oil futures on NYMEX) is trying hard to extend the recovery from six-week lows of $57.75 reached over the last hour, having regained the 58 handle, at the time of writing.
The black gold extended its week-long losing streak on Tuesday, mainly fuelled by receding US-Mid East tensions after both the US and Iran decided to stand down on the military responses after this month’s missiles attacks.
Meanwhile, the markets appear to have turned risk-averse ahead of the much-awaited US-China phase one trade deal signing scheduled on Wednesday. Therefore, the higher-yielding oil witnessed a fresh round of selling in tandem with other risk assets such as Treasury yields, European equities etc.
However, the bulls have managed to find some support from increasing expectations that the US weekly crude oil inventories are likely to have dropped last week, according to the latest Reuters poll.
Further, strengthening Chinese crude oil demand, as suggested by the latest fuel oil imports data from China, also helps limit the falls in the commodity. China’s crude oil imports in 2019 surged 9.5% from a year earlier, setting a record for a 17th straight year, as cited by Reuters.
Markets now eagerly await the American Petroleum Institute (API) weekly US Crude Stocks data due on the cards later in the NA session at 2130 GMT for near-term trading opportunities.
WTI Technical levels to consider