WTI: Lack of inventory data and doubts over future demand restrict price gains near $56

WTI trades near $56.00 during initial Asian sessions on Wednesday.
The benchmark refrained to extend recent upside due to the absence of weekly private inventory data while also fearing the negatives for the US-China trade talks.
$56.60 can keep challenging immediate upside with $55.50 likely being adjacent support to watch.

Anil Panchal FXStreet

WTI remains around $56.00 at the start of Asian trading on Wednesday. The crude benchmark refrained to extend its recent recovery as the absence of industry data on stockpile as well as doubts over the future energy demand, mainly due to on-going US-China trade talks, played their role. Traders may now await further clues on trade progress coupled with API details to determine near-term trading bias.

The US holiday on Monday shifted the American Petroleum Institute (API) weekly survey on crude stockpile to Wednesday from a day prior. The inventory level was last reported to have declined by -0.998M during the second week of February.

Despite the US President Donald Trump’s readiness to shift March 01 deadline for tariffs on Chinese products and repeated praise to the developments, there seem many hurdles that need to be crossed for world’s two largest economies to seal the trade deal.

After returning back from high-level trade negotiations in Beijing, the US diplomats discussed how to move forward in the talks when Chinese Vice Premier Liu He reaches to Washington. Bloomberg reported that sources say the US is likely to ask for stable currency policy from China during its next round of discussions.

While issues concerning property rights and economic restructure are still in the pipeline, another big demand from the US may weigh on the progress of a trade deal between the US and China.

With each new turn at the trade pact cutting down chances of success, energy traders fear the reduction in future demand if the talks fail.

WTI Technical Analysis

WTI needs to clear the 100-day simple moving average, at $56.60, in order to aim for $57.85 and $58.80 whereas $60.00 may please buyers then after.

In case of the quote’s failure to successfully cross $56.60, $55.50 and $54.20 could gain market attention ahead of highlighting $53.50 as a support.

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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