- WTI refrains to cross $54.00 at the Thursday start.
- Lack of fresh clues and persistent weakness in global data renewed supply glut concerns.
- The $52.70 and the $52.00 can offer immediate support while $54.00 and the $54.70 seem nearby resistances.
The WTI crude benchmark struggles around $54.00 on early Thursday as investors moved back to supply glut concerns. The WTI prices remained positive on Wednesday after the EIA inventory report joined hands with Venezuelan sanctions and supply outages at Canada and Mexico.
The WTI crude refrained from extending its previous strength as lack of fresh clues on energy front shifted market attention back to supply glut at the start of trading day.
On Wednesday, the EIA registered lesser than forecast increase of the weekly crude inventory levels. The Energy Information Administration (EIA) wind of the Department of Energy (DoE) released an increase of 1.3 million barrels into the crude stocks than market consensus of 2.18 million barrels. In addition to the crude inventories, gasoline stockpiles also registered lesser than forecast increase of 513,000 barrels while distillate inventories dropped below expectations to 2.3 million barrels.
Other than the inventory levels, comments from the Azerbaijan’s oil minister that OPEC+ alliance needs to extend production cuts in order to support crude recovery also please the energy buyers. Moreover, on-going sanctions on Venezuela by the US and pipeline problems at Canada and Mexico offer background support to the upmove.
During early Thursday, traders went back to supply glut concerns as disappointing employment stats from New Zealand, doubts over the Reserve Bank of Australia’s next policy moves and China’s holiday amid global slowdown fears played their part.
Considering the recent pattern of global economics, coupled with negative impact of trade protectionism, chances are high that crude might not recover to its late 2018 highs unless OPEC+ delivers strong cuts going forward.
WTI Technical Analysis
Failure to successfully clear the support-turned-resistance line, at $53.90, can drag the WTI to the $52.70 and then to the $52.00 rest-points. During the quote’s additional downside under $52.00, the $51.00 and the $50.30 may offer intermediate halts prior to highlighting $50.00 round-figure as a support.
On the upside, sustained break of $54.00 becomes prerequisite to aim for the $54.70 and the $55.00 whereas $55.55 and the $56.00 can please the buyers afterwards.
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