- WTI pares back gains amid bearish IEA report, mixed market mood.
- Broad USD supply, falling US crude supply to save the day for oil bulls?
- Six-week lows of 57.38 back in sight as sellers return.
WTI (oil futures on NYMEX) reverses the intraday gains and trades modestly flat in the European trading, having met fresh supply in the last hour after the bearish monthly oil market report from the International Energy Agency (IEA) hit the investors’ sentiment.
The IEA report showed that oil production from non-OPEC countries, including the US, is on the rise while maintaining the global oil demand growth estimates for 2020 at 1.2 million barrels per day (bpd). It further said rising non-OPEC oil production will help the market ward off any supply disruption threat such as the recent Mid East flare-up.
No sooner the report hit the wires, the black gold fell from a high of 58.37 to reach fresh daily lows at 57.88. Mixed feelings about the US-China trade deal amongst the market also keeps the recovery limited in the higher-yielding oil.
However, the further downside looks capped, as the barrel of WTI continues to derive support from the upbeat weekly Crude Stocks report published by the Energy Information Administration (EIA) on Wednesday. The EIA data showed that the US crude oil inventories fell by 2.5 million barrels, compared with expectations of a drop of 500,000 barrels.
Also, a generalized weakness seen in the US dollar helps cushion the losses in the commodity, as a weaker greenback makes the USD-denominated oil cheaper for foreign buyers. In the day ahead, the US consumer spending data will be closely eyed for any impact on the buck and broader market sentiment.
WTI Technical levels to consider
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.