WTI advances further towards the 53 mark amid risk-on mood

WTI (futures on NYMEX) is looking to regain the $53 mark, extending the recovery from a brief dip below $52.

The bulls fight back control amid an improvement in the risk sentiment and the resultant US dollar weakness, courtesy of the rising odds of the $1.9 trillion stimulus plan to get a green light from Congress.

However, the gains may remain elusive, as markets assess the impact of the global lockdowns, induced by the new covid strain, on the oil demand recovery prospects.

Further, a rise in the US rigs count by 2 to 387 last week and a bigger-than-expected crude stocks build remain a cause for concern for the oil bulls.

The latest data released by the Energy Administration Information (EIA) last Thursday showed that the US crude inventories rose by 4.4 million barrels in the week to January 15 versus expectations for a decrease of 1.2 million barrels.

Sellers returned after a brief recovery stint, as the sentiment remains undermined by an unexpected build in the US crude stocks data, as published by the American Petroleum Institute (API) late Wednesday.             

US crude oil inventories rose 2.6 million barrels in the week to Jan. 15. Vs. expectations of a 1.2 million barrels fall. The surprise rise in the stockpiles re-ignited coronavirus pandemic-led oil demand recovery concerns.

Meanwhile, markets appear to have shrugged off the news that Libya has resumed its oil production after pipeline repairs. Also, Indonesia’s seizure of the Iranian-flagged MT Horse and the Panamanian-flagged MT Freya vessels over suspected illegal fuel transfers off the country’s waters fails to have any significant market impact.

WTI traders now look forward to the weekly US crude inventories data and GDP release for fresh trading impetus.

WTI technical levels