Home WTI: Bulls await API data to attack $41.00
FXStreet News

WTI: Bulls await API data to attack $41.00

  • WTI struggles to extend recovery moves from $40.74 beyond $41.00.
  • Virus woes join OPEC output increase to combat drop in Russian oil production.
  • US Factory Orders, API inventories will be the key.

WTI eases to $40.88, down 0.10% on a day, while heading into the European open on Tuesday. The oil benchmark managed to flash gains for the last two days but a quiet Asian session seems to limit the moves off-late. As a result, traders eye the weekly release of private stockpile data from the American Petroleum Institute (API) for fresh impetus.

Recovery in the US economics, coupled with hopes of the further stimulus from global policymakers, led-by America, seems to have offered the latest bids to the back gold. Also supporting the mood could be the month-end position adjustments.

Even so, the recent increase in the Organization of the Petroleum Exporting Countries (OPEC) output driven by Saudi Arabia joins the broad fears of the coronavirus (COVID-19) led economic halt to challenge the bulls. “OPEC increased its output by 900,000 barrels a day last month to 23.43 million a day as Saudi Arabia, the United Arab Emirates and Kuwait restored additional production that was cut in June,” said Bloomberg. Talking about the virus, the World Health Organization (WHO) President Dr. Tedros Adhanom Ghebreyesus warned, as per the Sky News, while saying that there may never be a “silver bullet” to beat coronavirus (COVID-19). Additionally, the US policymakers’ struggle to agree over the much-awaited stimulus also weighs on oil prices.

It should also be noted that news suggesting a drop in Russia’s output by 16% in July failed to grab major attention. The reason could be traced from Russian Energy Ministry data, as reported by Reuters, suggesting a daily average output of 9.37 million barrels in July versus 9.32 million barrels in June.

Moving on, any further fall in the API Weekly Crude Oil Stock, for the period ending on July 31, could help the energy benchmark to cross $41.00. However, an increase in inventories versus -6.829M prior will join COVID-19 woes and policy deadlock in the US to target a sub-$40 area during the fresh downside.

Technical analysis

A falling trend line from July 21, currently around $41.45, precedes the previous month’s top near $42.55 while challenging the bulls targeting February month bottom close to $44.00. On the contrary, $40.00 and 50-day SMA near $39.30 restricts the quote’s short-term downside.


FX Street

FX Street

FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions.