- Stronger US dollar offsets bullish API report and Canadian outage.
- Bullish bias still intact, as $ 75 mark still remains in sight.
WTI (oil futures on NYMEX) witnessed good two-way price movements so far this Wednesday, now down more than a dollar from daily tops at $ 74.88, as the recovery attempts remain capped by the $ 74 handle.
The black gold broke its Asian consolidation range and fell sharply in the European session, largely on the back of resurgent US dollar demand across the board, as escalating US-Sino trade tensions continue to underpin the buck. A stronger greenback makes the USD-denominated oil more expensive for the holders in foreign currencies.
From a wider perspective, the barrel of WTI remains supported amid tighter oil markets, as the US sanctions on Iran looms, which could threaten Iran’s oil exports. More so, ongoing supply disruptions in Libya, Canada and Venezuela also help keep the prices near multi-year peaks.
Further, the American Petroleum Institute (API) crude oil inventories data showed that the US crude inventories fell by 4.5 million barrels to 416.9 million barrels in the week to June 29. The drawdown in stockpiles also remains oil-supportive in the near-term.
In the day ahead, trading activity is expected to be limited by the US Independence Day holiday and hence, attention turns towards the EIA weekly crude supplies data due to be reported tomorrow for fresh direction.
WTI Technical Levels:
Resistances: $ 75.06 (multi-year tops), $ 75.50 (psychological levels), $ 75.80 (key resistance).
Supports: $ 73 (key support), $ 72.62 (June 2nd low), $ 72
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