WTI struggles to hold API-led recovery, geopolitics/EIA data in the spotlight
|- API inventory report highlighted EIA data due to a surprise drop.
- Geopolitical play between the US and Iran continues to grab the headlines.
- FOMC may also contribute to the black gold’s volatility.
With the energy traders turning cautious ahead of the key data/events, WTI steadies near $54.00 during early Wednesday.
The black gold recently benefitted from a surprise draw in the US oil stocks as per the private survey of the American Petroleum Institute (API). The inventory level went down by -0.812 million during the week ended on June 14 versus the previous addition of +4.850 million barrels. Traders may now await today’s official stockpile data from the Energy Information Administration (EIA) report to confirm the industry reading.
Other than a decline in inventory, renewed optimism surrounding the US-China trade deal has also pleased energy buyers off-late.
At the geopolitical front, the US recently sent 1,000 additional troops to the Middle East in order to safeguard from Iran while Reuters just flashed a news report conveying a rocket fired on a foreign oil company in Iraq.
While EIA data and geopolitical plays concerning the US could keep directing near-term trade sentiment, monetary policy decision from the US Federal Reserve could also affect the energy benchmark as the US Dollar (USD) has an inverse correlation with the WTI.
Technical Analysis
Buyers need to cross current month high of $54.80 in order to aim for $55.10 and then rise towards February high towards $57.80, failing to which can recall $53.00, $50.60 and the $50.00 round-figure back to the chart.
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