WTI catches fresh bids to regain $ 59 ahead of EIA, Fed

WTI (oil futures on NYMEX) is back on the 59 handle in the European trades, having managed to hold on to the 58.85 demand area so far this Wednesday.

The latest uptick in the black gold could be due to a fresh bout of selling seen in the US dollar across the board, in the wake of falling Treasury yields. A weaker US dollar makes the USD-denominated oil cheaper for holders in foreign currencies.

However, the bounce is likely to remain limited as investors remain wary ahead of the key US Federal Reserve (Fed) monetary policy decision and the Energy Information Administration (EIA) weekly Crude Stocks data, especially after Tuesday’s American Petroleum Institute (API) showed that the US crude inventories rose by 1.4 million barrels in the week to Dec. 6 to 447 million vs. a fall of 2.8 million barrels expected.

Moreover, the ongoing US-China trade tensions continue to weigh on the global growth outlook and in turn on the oil demand outlook that adds to the downside in the barrel of WTI. Markets remain uncertain over whether the US will delay the planned tariff hike on China.

Further, reports that Venezuela’s crude output in November jumped more than 20% from the prior month renders oil price-negative. Markets now await the US weekly crude inventories report and Fed outcome for the next direction in prices.

WTI Levels to watch