WTI bounces back above $ 56.50 ahead of EIA, Fed minutes
|- US stocks drawdown, risk-on mood sends Oil higher.
- Middle East tensions, lower Saudi exports also lend support to oil bulls.
- Next of relevance is US weekly EIA Crude Stocks data and Fed minutes.
WTI (futures on Nymex) extends its winning-streak into a fourth straight day today, rallying 1% to reach the highest levels since last Wednesday at $ 56.72, as the sentiment remains underpinned by the bullish American Petroleum Institute’s (API) Crude Stocks report and a better market mood.
Oil tracks risk-on rally in equities, Treasury yields
Amid lingering trade war fears, hard Brexit fears and Italian political risks, the market mood remains lifted by the expectations that the Fed minutes may turn out to be less dovish, as the US recession fears ebb.
Therefore, the risk assets such as the Treasury yields are seen climbing over 2% across the curve while the European stocks enjoy 1.5% gains. A better risk sentiment boosts the demand for higher-yielding oil.
Moreover, the latest API data showed that US crude oil stocks fell by 3.5 million barrels in the week to Aug. 16 versus an expected 1.9 million barrels fall. This, in turn, collaborated to the bullish tone around the black gold.
Furthermore, the barrel of WTI draws support from rife Middle East tensions after the US Secretary of State Mike Pompeo said on Tuesday that the US would take every action it can to prevent an Iranian tanker in the Mediterranean from delivering oil to Syria in contravention of US sanctions, per Reuters.
Also, oil prices were helped by the recent data showing lower exports in June from Saudi Arabia, the OPEC’s no.1 oil exporter. Looking ahead, the prices will take fresh cues from the Energy Information Administration (EIA) Crude Stocks data due at 1430 GMT. The FOMC minutes will be also closely eyed for any impact on the USD-sensitive oil.
WTI Levels to watch
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