- WTI drops amid trade deal doubts, API US Crude Stocks build.
- Broad US dollar rebound adds to the weakness in oil.
- Focus on trade deal details and US EIA Crude Stocks data for fresh cues.
WTI (oil futures on NYMEX) ran through fresh offers over the last hour and almost tested six-week lows reached on Wednesday at $57.74 before recovering slightly to now trade around the 58 level.
Despite the recent recovery attempts, the black gold continues to remain pressured by concerns over rising US crude inventories while doubts whether the US-China phase one trade deal signing would help revive the oil demand from the world’s top two oil consumers. Late Tuesday, the American Petroleum Institute (API) data showed that the US crude inventories rose by 1.1 million barrels against a draw expected.
Further, the renewed strength seen in the US dollar across its main competitors amid a flight to safety ahead of the release of the details of the phase one trade agreement also collaborates with the oil-price weakness. A stronger greenback makes the USD-sensitive oil more expensive for foreign buyers.
Meanwhile, the bulls continue to fight for support amid expectations that the OPEC+ could now extend the oil output cut deal from March to June. Source: OPEC+ reportedly begin discussions to postpone output cuts decision to June – TASS
Looking ahead, the next of relevance for oil markets remain the US Energy Information Administration (EIA) Crude Stocks Change data due later for release at 1530 GMT while the phase one trade deal signing ceremony at 1630 GMT will hog the limelight this Wednesday.