WTI trims early Asian gains below $56.00 as risk-aversion escalates
|- WTI retreats towards six-week low flashed the previous day.
- Fears of US-China trade war join geopolitical and virus-led downbeat sentiment.
- API marked oil inventory build, EIA stockpile eyed.
- US dollar moves and risk catalysts will be important to watch.
WTI fades recovery moves from early February low while easing to $57.60 amid Wednesday’s Asian session. In doing so, the oil benchmark bears the burden of risk-off mood following the downbeat private inventory data.
As per the latest Weekly Crude Oil Stock report from the American Petroleum Institute (API), oil stockpiles for the week ended on March 19 rose from -1.000M to +2.927M. Given the industry data, WTI traders will wait for confirmation from the official Crude Oil Stocks Change figures for the stated period from the Energy Information Administration (EIA), expected -0.908M versus +2.396M prior.
It should, however, be noted that the fears of a slower global economic recovery and the US dollar strength are likely key hurdles for the energy benchmark. Recently, extended lockdowns in Europe and geopolitical fears emanating from North Korea and China have joined the doubts over the Sino-American trade deals to weigh on the risks.
This resulted in the US dollar’s safe-haven buying and dragged down the commodities, offering a double-barrel attack on the WTI. However, the oil buyers have hopes amid chatters over US-Russia pipeline jitters and Saudi-Iran tussle.
As a result, WTI traders will keep their eyes over the risk headlines for fresh impulse while also observing US inventories and Durable Goods Orders, not to forget Fedspeak, to seek a corrective pullback ahead of next week’s OPEC meeting.
Technical analysis
Despite piercing off the yearly support line and 50-day SMA, WTI sellers await a clear break of $57.00 to confirm the south-run.
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