WTI remains depressed below $80.00 despite upbeat API data, EIA stockpiles eyed
- WTI fails to cheer industry stockpiles data after a mixed daily performance.
- Fears of increase in supply join expectations of tighter monetary policies to favor bears.
- OPEC’s Barkindo expects oil market surplus beginning in December, IEA eyes easy prices.
- US EIA inventory data, Fedspeak will provide fresh impulse.
WTI begins Wednesday’s trading session on a back foot around $79.60, teasing the biggest daily loss in a week. In doing so, the oil benchmark ignores private oil stocks change figures from the American Petroleum Institute (API) while tracking firmer USD and demand-supply matrix.
As per the latest API Weekly Crude Oil Stocks data for the period ended on November 12, the inventories rose 0.655M versus an expected addition of 1.55M and previous depletion of 2.485M.
It’s worth mentioning that the fresh fears of the coronavirus, mainly in Europe and the UK, challenge the oil bulls of late. On the same line is an absence of any chatters favoring supply disruptions and downbeat comments from the International Energy Agency (IEA) and OPEC Secretary-General Mohammed Barkindo.
The IEA left its forecast for oil demand growth largely unchanged at 5.5 million barrels per day (bpd) for 2021 and 3.4 million bpd in 2022, as reported by Reuters. However, the institute did mention that "Reprieve from oil price rally could be on the horizon due to rising supplies."
On the same line was the analysis from OPEC’s Barkindo who said, "The projections show throughout the quarters of next year that there could be oversupply in the market. This is also further evidence of why we should be very cautious, measured in the decisions we take every month."
Additionally, fears of tighter money supply and an absence of cordial relations between the US and China, despite the latest virtual meeting, join firmer US Retail Sales for October to underpin the US Dollar Index (DXY) strength around a fresh 16-month high.
Moving on, weekly official oil inventory data from the US Energy Information Administration (EIA), expected +1.550M versus +1.001M previous readouts, will be important for fresh direction. Also on the radars will be the Fedspeak and demand-supply talks.
Technical analysis
Failures to cross the 10-DMA, around $80.30 at the latest, joins a sustained trading below three-week-old resistance line near $82.35, to direct WTI bears towards 50-DMA level of $77.95.
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.
