WTI lacks any firm intraday direction, stuck in a range below $78.00 mark amid mixed cues
|- WTI trades with a mild negative bias on Wednesday, albeit lacks follow-through selling.
- A combination of diverging forces is holding back traders from placing directional bets.
- Investors now look to the official US Oil inventory data for short-term trading impetus.
West Texas Intermediate (WTI) US Crude Oil prices come under some selling pressure and remain depressed through the first half of the European session on Wednesday. The commodity, however, remains confined in the previous day's broader trading range amid the mixed fundamental cues and manages to hold its neck above mid-$77.00s.
Data from the American Petroleum Institute released on Tuesday showed that inventories in the US shrank by 5.5 million barrels during the week to March 8. Adding to this, the Organization of Petroleum Exporting Countries (OPEC) maintained its forecast that world Oil demand will increase by 2.25 million barrels per day in 2024. This, along with the risk of potential supply shock stemming from conflicts in the Middle East, continues to act as a tailwind for Crude Oil prices.
The upside, however, remains capped in the wake of concerns about a slowdown in China – the world's second-largest economy and top Oil importer. Furthermore, the stronger-than-expected US inflation data fuelled speculations that the Federal Reserve (Fed) may delay interest rate cuts in the near term, which could hamper economic activity and dent Oil demand. This, in turn, is seen as a key factor exerting downward pressure on Crude Oil prices and warrants caution for bulls.
Looking at the broader picture, the black liquid has been oscillating in a familiar range over the past month or so. This points to indecision among traders over the next leg of a directional move, making it prudent to wait for a fresh catalyst before positioning for the near-term trajectory. Market participants now look to the official US inventory data due later this Wednesday, which, along with the USD price dynamics, should provide some impetus to Crude Oil prices.
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