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WTI drops to multi-day lows around $62.00

  • WTI loses the shine and recedes to the $62.00 mark.
  • EIA weekly report on US supplies coming up next.
  • FOMC minutes seen driving the sentiment later in the day.

Prices of the barrel of the American benchmark for the sweet light crude oil are trading on the defensive today, briefly dropping to fresh lows in sub-$62.00 levels.

WTI now looks to EIA, FOMC

Today’s correction lower in crude oil prices are tracking persistent concerns on the US-China trade dispute, exacerbated after US Secretary S.Mnuchin said there are no plans to resume talks in Beijing for the time being.

In addition, and adding to the ongoing weakness in prices, the American Petroleum Institute reported late on Tuesday another weekly build in US crude oil inventories, this time by 2.4M barrels.

However, a deeper pullback in crude oil prices seems unsustainable at least in the near term, as geopolitical risks and the OPEC+ agreement are expected to emerge as significant contention.

Later in the session, the official weekly report on US supplies by the EIA is expected ahead of the key release of the FOMC minutes.

What to look for around WTI

Prices of the WTI appear to have met some moderate resistance in the $63.70 region, or multi-day peaks. In the broader picture, and supporting prices, appear rising US-Iran tensions, turmoil in Libya, the so-called ‘Saudi put’ and the ongoing OPEC+ deal to cut oil output. However, US-China trade concerns remain far from abated despite the lack of fresh headlines as of late and emerge as the main hurdle for a more serious advance in crude oil.

WTI significant levels

At the moment the barrel of WTI is losing 0.88% at $62.26 and faces the next support at $61.49 (55-day SMA) followed by $60.29 (200-day SMA) and then $59.98 (low May 6). On the flip side, a break above $63.74 (61.8% Fibo of the October-December drop) would aim for $64.66 (high Apr.30) and then $66.46 (2019 high Apr.23).

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