- WTI rises more than 1.00%, up for the second day in a row.
- Receding pessimism concerning China’s coronavirus, upbeat manufacturing data and API inventories help the energy benchmark.
- Today’s EIA inventories and Fed Interest Rate decision will be the key to watch.
WTI takes the bids to $54.25 with 1.15% gains while heading into the European session on Wednesday. The energy benchmark extends the previous days’ gains amid cautiously optimistic trade sentiment as well as following upbeat private stockpile data.
The latest Crude Oil Stock data from the American Petroleum Institute (API) suggest a draw of 4.27 million barrels against an earlier increase of 1.6 million barrels. The data helps forecast today’s official inventory numbers from the Energy Information Administration (EIA) for the week ended on January 24. Forecasts suggest an increase of 0.46 million barrels versus the previous contraction of 0.405 million barrels.
Also supporting the energy benchmark’s pullback is the hope that the Chinese government will be able to tackle the coronavirus problem that’s likely to peak in the next ten days.
Further to the oil buyers’ favor are recently positive manufacturing data from the US as well as increased odds of sustained monetary policy easing elsewhere.
It’s worth mentioning that Tuesday’s pullback could be mainly because of the speculations that the OPEC-led alliance, mostly known as OPEC+, will extend global production cuts. Moreover, tensions in the Middle East also contribute to oil price recovery.
Technical Analysis
The November 20, 2019 low near $54.85 and 61.8% Fibonacci retracement of the commodity’s August 2019 to January 2020 upside, at $56.25, act as the near-term upside barriers. On the downside, the recent low of $52.15 and an upward sloping trend line since August 07, 2019, at $51.65 now, can please the sellers during fresh declines.
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