- Depressed amid US fuel stocks surge and risk-aversion.
- US-Iran geopolitical uncertainty leaves oil in a limbo.
WTI (futures on Nymex) keeps its range trading intact just below the 57 handle, as the bears consolidate two back-to-back days of losses, in the face of bearish crude inventories report form the US and trade/ geopolitical uncertainties.
The black gold trades depressed, as the investors’ sentiment remains weighed down by the surge in the US fuel stockpiles that suggested weak demand during the US summer driving season.
According to Reuters, “the U.S. Energy Information Administration (EIA) showed a larger-than-expected drawdown in crude stockpiles last week, but traders focused instead on large builds in refined product inventories dragging prices down.”
Moreover, a lack of clarity on the US-Iran geopolitical front combined with the US-China trade stand-off keep investors away from buying higher-yielding assets such as oil, fueling a wave of risk-aversion across the board. The European equities are trading with moderate losses while Treasury yields continue to trade on the back foot.
However, the buyers look to derive some support from broad-based US dollar weakness over the last hour, now prompting a tepid bounce in a bid to regain the 57 handle. A weaker greenback makes the USD-denominated oil cheaper for foreign buyers.
In the session ahead, the sentiment on Wall Street could offer fresh trading impulse to the oil traders, as they weigh in the latest US stocks data.
Levels to watch
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