WTI ignores API draw to consolidate gains beyond $41.50
- WTI seesaws in a choppy range between $41.60 and $41.75 off-late.
- API Weekly Crude Oil Stock dropped 8.587 million barrels versus -6.829M prior.
- Blasts in Beirut failed to put a bid amid delay in the US stimulus plan.
- EIA data, risk catalysts will be on the driver’s seat, US data may add filters.
WTI seesaws around $41.65 during the initial Asian session on Wednesday. The oil benchmark has been trading in a choppy range despite notable declines in the private inventory data. The reason could be traced from the market’s cautious sentiment that seems to take more clues from the US stimulus updates off-late.
Data from the American Petroleum Institute (API) suggest the weekly Weekly Crude Oil Stock depleted 8.587 million barrels during the week ended on July 31. The inventory figures from the industry player slipped below the previous -6.829 million barrels of a draw.
Talking about the risk catalysts, American Congress members haven’t yet provided any details of the much-awaited stimulus plan despite the expiry of unemployment claims benefits on Friday. The decision is keenly awaited as policymakers will go on a vacation after this week. Also adding to the risk-off mood be the latest tension between the US and China over TikTok and the coronavirus (COVID-19) woes.
It should be noted that the recent blast in Lebanon couldn’t escalate the previous day’s WTI buying despite marking a loss of over 70, not to forget injuries to more than 3,700. The moves can be joined to the global oil producers’ recent increase in the output as well as Beirut’s smaller contribution to the energy market.
Looking forward, weekly official Crude Oil Stocks Change from the Energy Information Administration (EIA) will become the immediate catalyst for the black gold. Forecasts suggest a recovery in stockpile draw from 10.612 million barrels to 3.267M during the week ended on July 31. While the data indicates further hardships for the oil bulls, a stimulus deal by the US decision-maker and/or upbeat US ISM Non-Manufacturing data can help the quote to remain positive.
Higher low formation propels the commodity to attack the previous month’s high of $42.52 in search of February’s bottom surrounding $44.00. On the contrary, $40.00 becomes near-term key support.