WTI: Downside opening up towards $ 59 ahead of EIA report
- Bears taking back charge amid souring risk sentiment, as global growth and demand concerns linger.
- Bearish API report also weighs, as focus shifts to the US EIA crude inventories report.
The bears are seen extending control in the European session, now pushing WTI (oil futures on NYMEX) to fresh session lows near 59.60 levels amid souring risk appetite, as reflected by the drop in the Treasury yields and European equities.
Markets continue to remain wary over the global economic slowdown fears and its resultant impact on the oil demand, which eventually collaborated to the renewed weakness in the barrel of WTI.
Meanwhile, an unexpected build in the US crude stockpiles, as reported by the American Petroleum Institute (API) a day before, also continues to undermine the sentiment around oil. The API report showed that the US crude inventories rose 1.9 million barrels in the latest week, while analysts had forecast a decrease of 1.2 million barrels.
However, the extent of the corrective slide from 2019 tops of 60.39 remains to be seen amid ongoing OPEC output cuts and Venezuela supply disruption risks. The black gold rallied on Tuesday Venezuela’s main oil export port of Jose and its four crude upgraders were unable to resume operations following a massive power blackout on Monday, the second in a month, as Reuters reports.
Meanwhile, the renewed risk-aversion wave that gripped the European markets will continue to remain WTI-negative, as we head towards the weekly release of the US official government crude stockpiles data.
WTI Technical Levels
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
