WTI bulls attack $77.00 after OPEC+ JTC, API stockpile, focus on EIA inventories, US data

WTI crude oil prices grind higher surrounding $77.00 during Wednesday’s Asian session.

The black gold rose to the fresh high since November 26 the previous day during the two-day uptrend, backed by likely positives from the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, as well as a jump in the API stockpile draw. It should be noted, however, that cautious sentiment ahead of the US ADP Employment Change for December and Federal Open Market Committee (FOMC) Meeting Minutes, not to forget the official inventory data from the US Energy Information Administration (EIA) probe the oil bulls.

That said, the latest industry inventory figures from the American Petroleum Institute (API) dropped more than double the previous draw of 3.09M to -6.432M for the week ended on December 31.

On a different page, the OPEC group matched wide market expectations to go ahead with the 400,000 Barrels Per Day (BPD) output hike. “World oil markets are widely expected to remain prone to geopolitics in 2022, with ‘saber-rattling’ over the persistent Russia-Ukraine standoff and ongoing Iranian nuclear negotiations likely to be closely monitored by OPEC+,” said CNBC after the verdict.

Elsewhere, the US ISM Manufacturing PMI dropped to the lowest in 11 months in December, 58.7 versus 60.0 forecast and 61.1 prior, whereas November’s JOLTS Jobs Openings came in lower than the upwardly revised previous reading of 11.091M to 10.562M.

The downbeat US data joined the market’s firmer sentiment, amid hopes of less severe virus contagion, joined downbeat US inflation expectations to probe the US dollar bulls and favor oil buyers the previous day. the US inflation expectations, as per 10-Year Breakeven Inflation Rate numbers from the Federal Reserve Bank of St. Louis (FRED) eased from a six-week high to 2.57% at the latest, which in turn tamed Fed rate-hike chatters.

That said, the US data and risk catalysts are likely to direct short-term oil moves. While the US ADP and FOMC Minutes are the keys for clear direction, weekly prints of the EIA Crude Oil Stocks Change for the week ended on December 31, expected -3.4M versus -3.576M prior, will also be important to watch.

Technical analysis

Although RSI conditions challenge further upside, WTI bulls remain hopeful until witnessing a clear downside past the 100-DMA level of $74.55. Alternatively, the late November’s swing high, close to $79.00, and the $80.00 threshold restricts short-term advances.