- WTI remains pressured after flashing the heaviest loss in a month the previous day.
- API stockpile grew 8.731 million barrels versus an expected drop of 4.8 million barrels.
- The rivalry between the world’s top two economies adds pressure on the energy markets.
- EIA data, US-China story will be the key to follow for fresh impulse.
WTI fails to carry the pullback from $32.00 while taking a U-turn from $32.50 to currently around $31.77 amid the initial Asian session on Thursday. While the tension between the US and China, coupled with the coronavirus (COVID-19) woes keep weighing on the black gold, weekly inventory data from the American Petroleum Institute (API) offered the latest losses to the energy benchmark before its recovery.
As per the latest API figures for the week ended on May 22, the US Weekly Crude Oil Stock surged by 8.731million barrels versus the previous draw of 4.8 million barrels.
Talking about the US-China story, the US House of Representatives recently passed a bill to sanction Chinese diplomats involved in the Xinjiang case. Even if the bill already crossed the senate a few days back, the move strengthens calls for additional sanctions on the dragon nation, as signaled by US President Donald Trump on early-Wednesday.
Also citing fears of further political tension between the world’s two largest economies is the news suggesting Hong Kong’s loss of special trading status with the US.
In a reaction to the Trump administration’s moves, Beijing’s embassy recently suggested that it will retaliate to the US meddling in the Hong Kong issue.
Against this backdrop, the market’s risk-tone heavies with the S&P 500 Futures parting ways from its Wall Street benchmark and drop 0.15% to 3,030.
While the official US Crude Oil Stocks Change from the Energy Information Administration (EIA) will be the key for oil traders, trade/political headlines from the US and China shouldn’t also be missed. Forecasts suggest the EIA stockpiles recover from -4.983 million barrels prior to -2.5 million barrels, which if matched could add downside pressure on the black gold.
Technical analysis
Unless providing a daily close below Friday’s low near $30.90, bulls remain hopeful to confront a 100-day EMA level of $35.40.
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