- The energy buyers challenged by soft data, inventory build and doubts over global growth.
- Further increase in supply could drag the black gold to revisit 200-day SMA.
WTI struggles around $64.50 ahead of the European open on Thursday. The black gold is capped near the five-month high off-late as earlier geopolitical threats were tested by the global growth concerns, inventory build and soft data. Traders may now focus on the late-Friday release of weekly Baker Hughes US oil rig counts for further direction.
The energy benchmark previously took advantage of the US challenge to Iran and geopolitical hostilities in Libya, not to forget increased optimism surrounding the US-China trade deal. However, buyers couldn’t rule for long as the US-EU trade spat and increase in EIA stockpiles joined China’s mixed inflation data.
The US recently warned the EU to levy fresh tariffs on $11 billion worth of EU products. The same triggered another round of trade-war fears that shook the global economy last year. Also adding to the pessimism was the International Monetary Fund’s (IMF) global economic forecast. The international cut global gross domestic product (GDP) forecast for a third consecutive time in the last six months to the lowest since 2009.
The Energy Information Administration’s (EIA) released US oil stocks details for the week ended on April 05. As per the report, the inventory levels rose by 7.029 million barrels versus 2.294 million barrels’ forecast and 7.238 million barrel prior.
Other than the aforementioned details, China’s inflation numbers for March also played their part to trouble energy traders. The headline consumer price index (CPI) declined behind 2.4% market consensus and 1.5% prior to 2.3% on YoY while flashing -0.4% figure versus +1.0% previous and -0.2% expectations on the monthly format. However, Producer Price Index (PPI) matched 0.4% market forecast on the yearly against +0.1% prior readout.
The Baker Hughes US oil rig counts continue to question the supply-crunch as the oil rigs are on the rise since the last six weeks. The number rose to 831 with the increase of 19 rigs during the week ended on 05 April.
WTI Technical Analysis
WTI needs to provide a successful break of $65.60 and $66.70 whereas $67.10 can entertain bulls then after.
Meanwhile, $63.30, $63.00 and 200-day simple moving average (SMA) level of $61.50 could act as nearby support.
Share
