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  • WTI takes a U-turn from $63.63 even as API inventories marked a build during last week.
  • EIA oil demand forecast supersedes on the US dollar weakness.
  • Inflation data from China, US ahead of EIA stocks shouldn’t be missed, American covid stimulus will be the key.

WTI bears catch a breather around $64.00, currently near $63.85, amid the initial Asian trading on Wednesday. In doing so, the black gold seems to have ignored the recently released private inventory data from the American Petroleum Institute (API) as well as oil demand forecast from the Energy Information Administration (EIA).

US API Weekly Crude Oil Stock for the period ended on March 05 rose past 7.356 million barrels of previous readings to 12.792 million barrels.

On Tuesday, the EIA came out with the news suggesting a reduction in the global oil demand growth by 60,000 barrels per day (bpd) to 5.32 million bpd in 2021, per Reuters. The news disappointed the oil buyers who have been cheering the demand hopes amid supply cuts.

The fears of lesser energy demand also ignored the US dollar weakness that should have ideally helped the commodity. That said, the US dollar index (DXY) dropped back below 92.00 after rising to 92.50, the highest since November 24, 2020, the previous day. It’s worth mentioning that the Wall Street benchmark cheered the stimulus with Nasdaq rising 4.0%, closing with 3.69% gains, by the press time.

Looking forward, updates on the $1.9 trillion US coronavirus (COVID-19) relief bill become the key. On the data side, inflation figures from the US and China for February as well as official weekly inventory numbers from the EIA, expected -0.833M versus 21.563M prior, for the week ended on March 05 will be important as well. Given the latest consolidation of gains, any inventory reduction should be strong enough to recall the oil buyers.

Technical analysis

February’s top near $63.70 offers immediate support ahead of 21-day SMA and an upward sloping trend line from February 01, respectively around $61.50 and $60.90. Meanwhile, the year 2020 top near $65.45 guards nearby upside of the oil benchmark.