- Pre-Fed caution trading dominates, as revived US-China trade optimism fades.
- Fails to benefit from Iraq’s Basra explosions, US-Iran conflict.
- All eyes on US EIA crude stocks data ahead of the FOMC decision.
WTI (futures on Nymex) is seen breaking its bullish consolidation phase to the downside in the European session, as the bears appear to take back charge amid cautious trading sentiment heading into the key FOMC monetary policy due to be announced later today at 1800 GMT.
Markets eagerly await the Fed’s stance on the interest rate cuts and economic projections that will have a significant impact on the investors’ sentiment in the coming months. Moreover, the pre-Fed caution trading appears to have overshadowed the recent US-China trade optimism and the European Central Bank (ECB) stimulus talks that drove the global stocks to multi-week tops and oil prices nearly 4% higher on Tuesday.
Further, the black gold also paid little attention to the escalating US-Iran conflict after an Iranian official said Tehran won’t extend its two-month deadline set for the other remaining parties to the Joint Comprehensive Plan of Action (JCPOA) to fulfill their obligations under the nuclear deal.
Meanwhile, the reports that a rocket hit the site of the foreign oil companies in Iraq’s Basra and injured two staff also failed to raise supply threats and therefore, lend any support to the bulls.
The immediate focus now remains on the official US government weekly crude inventories data that will be published by the Energy Information Administration (EIA) at 1430 GMT for fresh trading impetus while the Fed verdict will emerge the main market driver.
On Tuesday, the American Petroleum Institute (API) showed that the US crude stocks fell by 812,000 barrels last week to 482 million.
WTI Technical Levels
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