WTI crude oil grinds higher around $79.00 ahead of EIA inventories

WTI picks up bids to $78.80 as buyers pause the five-day uptrend around multi-day top during early Wednesday. In doing so, the energy benchmark struggles to extend the rally amid cautious optimism in the market and the firmer US Dollar Index (DXY) prices.

The US Dollar Index (DXY) snapped a three-day downtrend on Tuesday, keeping the upside moves near the 94.00 threshold by the press time while tracking firmer US Treasury yields and stronger data at home. However, Wall Street had its good day but the S&P 500 Futures drops 0.10% intraday at the latest amid indecision over the US stimulus and raising the debt ceiling issues.

US President Joe Biden stays optimistic over having the US debt ceiling extended before the October 18 deadline despite the GOP rejection. The reason could be the latest shift in the Republican policymakers’ tone and the global rating giant Moody’s keeping of the US credit rating.

Furthermore, the US Trade Representative’s (USTR) investigation over the exclusion of China imports also keeps the oil buyers hopeful.

Above all, the OPEC+ verdict to respect the previous agreement of increasing the output in a phased manner, versus the market expectations of higher supplies, keeps the oil buyers hopeful.

On the contrary, the Sino-American tussles over Taiwan and fears of virus resurgence, as well as the Fed tapering, challenge the WTI bulls.

It’s worth noting that the American Petroleum Institute (API) Weekly Crude Oil Stock dropped below 4.127M previous reading to 0.951M for the period ended on October 01.

Moving on, the weekly reading of the official oil stockpile from the US Energy Information Administration (EIA) will join the US ADP Employment Change for September to direct short-term oil moves.

Technical analysis

Unless declining back below the July month’s high near $76.40, WTI bulls remain hopeful to recall the $80.00 on the chart.