- WTI is back from a rally above $ 53 amid cautious market sentiment.
- Oil remains pressured amid an unexpected surge in US crude inventories.
- The focus remains on US jobless claims and EIA crude stock data.
He WTI (NYMEX crude futures) falls back below the $ 53 level during the European session on Thursday, reversing the bounce of the Asian session, as markets Cautious Ahead of Weekly Oil Stock Data from the Energy Information Administration (EIA for its acronym in English).
Sellers have returned after a short recovery period as sentiment continues Affected by an Unexpected Increase in US Crude Stock Data, as released by the American Petroleum Institute (API) Wednesday night.
US Crude Oil Inventories increased 2.6 million barrels in the week of January 15, worsening expectations of a 1.2 million barrel drop. The surprising increase in stocks rekindled Concerns about the recovery in oil demand triggered by the coronavirus pandemic.
Meanwhile, a sense of caution appears to have established in the markets ahead of the European Central Bank’s (ECB) monetary policy decision, which weighed on demand for higher-yielding assets such as oil.
However, further drop in crude prices appears muffled amid a vastly weaker US dollaras US President Joe Biden’s stimulus push has weakened the dollar’s appeal as a safe haven. A weaker dollar makes dollar-denominated oil cheaper for foreign buyers.
Markets await weekly US jobless claims data for a further boost in the USD, which will have an impact on USD-sensitive black gold prices. Meanwhile, the EIA crude stock change data will have a significant influence on the oil market, especially after the pessimistic API data.
WTI technical levels
“The rejection at the channel hurdle is supported by falling highs (bearish pattern) on the RSIa of the 4-hour chart. As such, a deeper drop could be seen before the weekend. Support is at $ 51.81 (Jan 17 low), followed by $ 51.00 (multi-month uptrend line support), ”said Omkar Godbole, analyst at FXStreet.
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