WTI prints mild losses below $40.00, focus on API stockpile data
- WTI fails to justify pullback from $39.30, recedes from four-day low.
- Fears of US-China tussle, virus woes upend recovery moves despite upbeat PMIs from Beijing.
- Risk catalysts, API weekly inventories will offer fresh impulse.
WTI eases to $39.42, down 0.62% on a day, during the pre-European session on Tuesday. The black gold cheered improvement in the market’s risk-tone the previous day while downbeat headlines concerning Hong Kong and the coronavirus (COVID-19) seem to weigh on the mood off-late. Even so, the oil prices seesaw near the four-day top ahead of the American Petroleum Institute’s (API) Weekly Crude Oil Stock data for the US.
The energy benchmark benefited from China’s upbeat official PMIs during the early Asian session. The mood also got support from the prepared remarks of US Treasury Secretary Steve Mnuchin who suggested further easing and robust economic strength. It should also be noted that the upbeat performance of risk catalysts like the S&P 500 Futures and stocks in Asia offered additional strength to the quote earlier.
However, China’s passage of the Hong Kong security law renewed fears of the Sino-American tussle and weigh on the oil prices. Also on the negative side are worrisome virus figures from China, the US and Australia that suggest the brewing of wave 2.0.
On Monday, the week-start optimism on the energy desk gained clues from the upbeat US data and Chinese announcements concerning the virus vaccine. Also pleasing the bulls was the headline from Reuters, relying on estimates from tanker-tracking company Petro-Logistics, which said, “OPEC oil supply fell by 1.25 million barrels paer day (bpd) in June from May's level.”
Moving on, a slew of data from the US as well as the Fed Chairman Jerome Powell’s testimony will offer immediate direction to the oil benchmark. Further, the private inventory report from API, prior 1.0749M, will also affect the trade decisions.
Technical analysis
Multiple highs since June 08 together constitute $40.55/60 as the key near-term resistance ahead of the monthly top surrounding $41.65. On the downside, 21-day EMA and an ascending trend line from May 28 could restrict the oil benchmark’s short-term declines around $37.70/65.
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.
