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  • WTI June Futures remain on the front foot amid mostly quiet markets.
  • Expectations of receding inventory build, Goldman’s upbeat view seem to back the latest run-up.
  • US dollar weakness adds strength to the buying.
  • API inventories, US ISM Manufacturing PMI in focus.

WTI futures on NYMEX take the bids near $21.40, up 4.80% on a day, during Tuesday’s Asian session. While coronavirus (COVID-19) worries have earlier dragged the oil benchmark to the multi-year low, recent expectations of receding inventory build seem to favor the recovery moves.

Unconfirmed reports suggesting the lowest increase in inventories at Cushing since mid-March add strength to the black gold’s pullback off-late.

During the early-week trading, the energy benchmark took clues from the Goldman Sachs report suggesting the three-stage rally towards $25.00. “With the market’s rebalancing now in motion, we expect a three-stage oil price rally, from relief, to cyclical tightening, and finally structural repricing,” said the report.

Also supporting the recent price moves could be the US dollar’s weakness amid downbeat economics, tussle with China and pandemic worries.

Distantly, the start of the OPEC+ production cut by 9.7 million barrels a day also positively affect the oil prices.

Oil traders may now watch for the weekly release of private inventory data from the American Petroleum Institute (API), up for publishing at 20:30 GMT. The industry stockpile for the week ended on May 1 might follow the footsteps of the previous reduction to 9.978 million barrels into the inventories. That said, the outcomes should help the energy prices to extend recent recovery moves.

Technical analysis

Having successfully breached 21-day SMA, currently around $19.27, WTI aims for April 21 top near $22.60 ahead of targeting $26.80 comprising 50-day SMA. Alternatively, a downside break below 21-day SMA level of $19.27 may take rest near $16.65, including 10-day SMA, before challenging April 28 low near $10.40 and $10.00 round-figure.