- WTI pares the early-day gains following Moody’s downbeat forecasts.
- The early-Asia recovery took clues from weak US dollar, upbeat API data and technical breakout.
- EIA’s weekly oil inventories, US GDP and virus updates will be the key catalysts.
WTI drops from intraday high of $14.40 to $13.57, up 10% on a day, while heading into the European session on Wednesday. While API data and weak US dollar, backed by technical breakout, favored the oil buyers during the early-Asian session, the latest pullback is likely due to Moody’s downbeat forecasts.
In its latest oil market report, the global rating giant Moody’s cut price estimation for the current year and 2021 to US$30 per barrel (bbl) and US$40 respectively.
The black gold bounced off the weekly low during the early Asian session after the weekly release of private inventory data from the American Petroleum Institute (API) suggests a build of 9.978 million barrels versus the previous addition of 13.226 million barrels into the inventories.
It should also be noted that the weak US dollar also helped the energy benchmark to extend the pullback moves.
Even so, the present US-China tussle and uncertainty surrounding the macroeconomic restart after coronavirus (COVID-19) carnage keep the bulls chained. Additionally, report that the April month oil supplies from the Organization of the Petroleum Exporting Countries (OPEC) surged to the highest since December 2018, as per Reuters, also weigh on the oil prices.
Oil traders may now keep eyes on the weekly official Crude Oil Stocks Change from the Energy Information Administration (EIA), expected 10.6 million barrels versus 15.022 million barrels, for fresh impulse. Furthermore, the preliminary reading of the US Q1 GDP, expected -4.0% versus +2.1% prior will also be important to watch for near-term direction.
Technical analysis
The energy benchmark recently confirmed inverse head-and-shoulders bullish technical pattern on a 30-minutes chart. As a result, the bulls are targeting $17.00 with 200-bar SMA near $14.65 and $15.60/65 likely acting as intermediate halts. Meanwhile, the quote’s sustained declines below $13.60 will defy the bullish chart formation and can recall $12.00 whereas $10.00 becomes the key during the further downside.
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