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  • USD weakness and OPEC supply cuts extension lend some support.
  • Smaller-than-expected US stockpiles draw, cautious sentiment remain a drag.

WTI (futures on Nymex) stalled its Asian decline just below the midpoint of the 56 and from there attempted a tepid recovery, now regaining the 57 handle amid cautious trading sentiment and holiday-thinned liquidity.

The downside remains cushioned in the black gold, thanks to the recent OPEC+ output cuts extension, escalating US-Iran geopolitical tensions and a broadly weaker US dollar. The greenback was downed by weak US fundamentals and increased Fed rate cut expectations.

Despite the latest leg higher, the barrel of WTI remains exposed to downside risks amid bearish Energy Information Administration  (EIA) crude inventory report and looming US-China trade risks.

The latest EIA data showed that the US crude inventories dropped by 1.1 million barrels last week vs. expectations for a decrease of 3 million barrels.

Levels to watch