WTI bounces 1% to $ 56.50 on OPEC supply cut talks, eyes API data

• Bulls offered reprieve on supply cut chatters after Tuesday’s 7% slide.
• Dead cat bounce ahead of the API fuel stocks data?

WTI (oil futures on NYMEX) caught a fresh bid-wave and broke the downside consolidation phase, bouncing nearly $ 1 on the latest reports that the OPEC and its allies are reportedly discussing oil supply cut of 1.4 million barrel per day (bpd).

The latest news rescued the bulls, as they were consolidating yesterday’s 7% slump near yearly lows reached at 54.77 late-Tuesday. The 7% plunge was mainly driven by mounting oversupply and economic slowdown concerns. It’s worth noting that black gold has lost over a quarter of its value since early October in what has become one of the biggest declines since a price collapse in 2014.

The barrel of WTI entered into a bear market last week and remains exposed to further downside risks, with the latest IEA monthly oil market report suggesting a cut in the demand forecast for the OPEC by 300k bpd in 2019.

Adding to the downside in oil prices, the US Department of Energy’s Energy Information Administration (EIA) said on Tuesday, the US crude oil output from its seven major shale basins is expected to hit a record 7.94 million barrels per day (bpd) in December

Looking ahead, it remains to be seen if the commodity can sustain the bounce heading into the US API crude stockpiles report due on the cards at 2030 GMT.

WTI Technical Levels