WTI turns south from multi-month highs, holds $53 mark ahead of EIA

• WTI retreats from near $54 amid profit-taking, covid woes.
• DXY’s bounce also caps API stocks draw-led upsurge.
• Next of note remains EIA crude stocks data and covid updates.

WTI (futures on NYMEX) retreats from a new 11-month high of $53.93 reached earlier in the Asian session but holds above the $53 mark ahead of the official US weekly crude stock data.

The ongoing rally in the black gold received a fresh boost after the American Petroleum Institute (API) reported a massive inventory draw in its weekly crude stocks change data published late Tuesday. The API data showed that the US crude inventories fell by 5.8 million barrels last week vs. the -1.663 million drawdown seen before.

Further, the retreat in the US dollar led by the corrective decline in the US Treasury yields also aided the upside in oil. Strong demand for the US bonds in the government bonds on Tuesday, triggered the sell-off in the Treasury yields across the curve. A weaker greenback makes the USD denominated oil cheaper for foreign buyers.

However, the US oil eased from multi-month highs on Wednesday amid a profit-taking slide after facing rejection at the $54 threshold. Further, intensifying concerns over the coronavirus growth worldwide threaten economic recovery prospects, weighing negatively on the higher-yielding oil.                       

Additionally, the greenback also seems to have caught a fresh bid-wave on covid fears-led risk-aversion, limiting the additional gains in the WTI barrel. Investors also await the US Energy Information Administration’s (EIA) weekly crude inventories for the next direction on the prices.

WTI technical levels

As the US oil retreats, “late-2019 lows near 51.00 can easily restrict pullback moves, sellers may avoid entries unless witnessing a clear break below an ascending trend line from November 02, at $49.15 now,” FXStreet’s Analyst Anil Panchal noted.

WTI additional level