WTI falls to mid-$62s after EIA reports larger-than-expected build in crude stocks
- Easing concerns over global economic slowdown help commodities gather strength.
- EIA says crude oil stocks increased 7.2 million barrels in the week ending March 29.
- WTI stays close to 2019 highs.
Crude oil came under modest bearish pressure in the last hour after the weekly report published by the Energy Information Administration showed that crude oil stocks in the U.S. increased by 7.2 million barrels in the week ending March 29 compared to analysts' estimate for a draw of 425K barrels. With the initial reaction to the data, the barrel of West Texas Intermediate eased from the 2019-high that it set at near $63 earlier in the session and was last seen virtually unchanged on the day at $62.50.
Despite this recent pull-back, crude oil looks to preserve its bullish momentum supported by fundamental developments. Latest data from China showed that the economic activity in the service sector expanded at a stronger pace than expected in March to revive hopes of the world's second-biggest economy gaining traction amid the stimulus provided by the government and eased concerns over a dismal oil demand outlook.
Additionally, risk-sensitive commodities took advantage of the risk-on environment that is reflected by the decisive upsurge witnessed in the US T-bond yields and stock markets.
Technical outlook
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
