WTI Trades Above $ 47.50 As Crude Traders Watch Incoming FOMC Announcement

• WTI trades at the forefront on Wednesday ahead of the FOMC meeting amid bullish macrocatalysts.
• First-month WTI futures set a new post-pandemic session high of $ 47.88.

WTI has swung between red and green trading recently, but is still well supported near post-pandemic clearance highs above $ 47.50. Trading is likely to continue to be choppy and directionless ahead of the FOMC’s monetary policy announcement on Wednesday at 7:00 p.m.GMT, which in itself could trigger choppy price action. Currently, first-month WTI futures are trading at gains of around 20 cents or 0.4%.

Crude oil markets get support from bullish macrocatalysts

The mood for both the Brexit negotiations and the US fiscal stimulus has improved since the start of the week; In the first, it appears that the EU and the UK are moving closer to an agreement on the application of a level playing field in exchange for the UK’s access to the EU single market, although fishing appears to be not doing so well. In the latter, it was reported that great progress was made today towards obtaining a 900B package and Congressional leaders continue to urge that they will not leave for Christmas without reaching an agreement. Therefore, risk appetite remains broadly supported and WTI continues to trade very close to its post-pandemic highs, out of which it set new ones Wednesday morning at $ 47.88.

Additional support to the positive sentiment in the crude oil market was a larger-than-expected draw in the official EIA crude oil stocks of 3.135 million barrels (implying better-than-expected demand over the past week). This comes after last week’s huge inventory buildup of 15 million barrels and will ease some concerns about the short-term impact on crude oil demand from the Covid-19 spread in the US.