- WTI fails to extend the previous day’s declines despite the risk-off sentiment.
- China’s data flashed upbeat outcome but trade war fears raise challenges.
- Iraq still not confirmed the OPEC+ output cut to customers.
- EIA marked lesser than expected build in inventors, followed API’s footsteps.
WTI Futures for June seesaws around $24.05/10, up 0.25% on a day, amid the early Thursday. The oil benchmark seems to struggle between the mixed signals affecting the demand-supply during Asia.
Trump administration kept alleging China for one thing and the other, be it virus or trade. However, US Secretary of State’s signals to again interfere in the Hong Kong-China issue become the latest addition to contribute towards the risk-off.
On Wednesday, the US Energy Information Administration (EIA) reported an increase of 4.6 million barrels in the inventories for the week ending on May 01, which was well under the market expectations of 7.1 million addition.
On the contrary, S&P Global Platts, a provider of energy and commodities information, said that US gasoline demand to rise as 23 states lift coronavirus restrictions.
Also on the positive side could be China’s upbeat trade figures as well as an inactive performance by the US dollar that has a negative correlation with the commodities.
It should also be noted that the CNBC reports, “Iraq, OPEC’s second-largest producer after Saudi Arabia, has not yet informed customers of impending restrictions on its oil exports.” The news could weigh on the oil price if the Arab nation steps back from the deal in a surprise announcement.
Looking forward, Friday’s NFP and weekly Baker Hughes Rig Counts can offer immediate direction to the black gold. Additionally, virus/trade updates can offer background music.
Technical analysis
A daily closing beyond 50-day SMA level of 24.60 becomes necessary for the buyers to aim for April month top surrounding $29.15. Alternatively, a sustained break below the weekly support line, at $23.00, can recall the bears targeting sun-$20.00.
Share
