WTI prints daily lows in sub-$56.00 levels ahead of API

Prices of the American reference for the sweet light crude oil are grinding lower in the middle of the week, shedding further ground after recording new 2019 highs near $56.40 during overnight trading.

WTI looks to FOMC, data

The rally in prices of the West Texas Intermediate now appears to be taking a breather after moving to fresh YTD peaks earlier in the session.

Prices of the WTI have managed to regain the key $56.00 mark and above per barrel always in tandem with increasing hopes of a positive outcome from the US-Sino trade talks.

Despite the ongoing correction from the boundaries of the 100-day SMA today, prices are expected to remain supported by potential disruptions, particularly from Venezuela and Libya and the so far goodwill from Saudis to keep cutting its production more than ‘required’ by the OPEC+ agreement.

Looking ahead, the FOMC meeting is expected to deliver a somewhat dovish tone, which could lend some extra support to USD-denominated assets. Later, the American Petroleum Institute will report on the US crude oil inventories.

What to look for around WTI

Hopes of a US-China trade deal have lent extra oxygen to crude oil prices in past sessions and this should remain a key driver in the very near term, although the likeliness of a trade dispute between the US and the EU carries the potential to remove some headwinds from the upbeat sentiment. On the broader picture, the ongoing OPEC+ agreement to curb oil production, US sanctions against Venezuelan and Iranian oil exports and the so-called ‘Saudi Put’ should keep a firm floor under crude prices for the time being.

WTI significant levels

At the moment the barrel of WTI is down 0.58% at $55.71 and a break below $54.25 (10-day SMA) would aim for $53.85 (21-day SMA) and finally $51.15 (low Feb.11). On the flip side, the next up barrier emerges at $56.38 (2019 high Feb.18) seconded by $56.67 (100-day SMA) and then $58.00 (high Nov.16 2018).