- WTI keeps a fresh high since March 2020 despite downbeat API stockpiles.
- API Weekly Crude Oil Stock rose to 1.973M during the last week.
- Risk-on mood, US dollar weakness adds to the commodity’s strength.
- Global PMIs, EIA data awaited ahead of the key Fed decision.
WTI stays positive around $47.75 amid the initial Asian session on Wednesday. The energy benchmark recently shrugged off weekly inventory data from the American Petroleum Institute (API) while cheering the risk-on mood near the fresh high since March 04, 2020. Although the official stockpiles from the Energy Information Administration (EIA) will be the key, PMIs from Western leaders and the Fed meeting will also be important to watch going forward.
API inventories grew 1.973 million barrels versus 1.141 million barrels during the week ended on December 11. With the minor increase in the inventories, oil traders concentrated on the major risk flows to cheer the upside.
The coronavirus (COVID-19) vaccine news and hopes that the US covid stimulus will soon be out recently pleased the market players. The optimism added further weakness to the greenback and boosted demands for commodities.
After a jointly developed COVID-19 vaccine by Pfizer and BioNTech, Moderna is ready to face the US Food and Drug Administration (FDA) for its drug’s approval. On the other hand, the FDA has recently approved a first at-home test for the deadly virus.
US Treasury Secretary Steve Mnuchin is talking the much-awaited stimulus deal with House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell by press time. Earlier in the day, House leader McConnell said that the policymakers won’t leave Washington unless getting a deal.
On the contrary, surging virus cases leads London towards stricter lockdowns while New York is also eyeing the same amid capacity constraints in hospitals. Further, Span, Germany and Ireland are also badly hit in the recent wave of the deadly virus, not to mention the British hint of a COVID-19 variant.
Amid these plays, Wall Street benchmarks gained over 1.0% each while marking the optimism.
Looking forward, EIA’s inventories, expected -3.5M versus +15.189M, will be the key to follow coupled with the PMIs and Fed signals.
Read: Federal Reserve Preview: How a dose of economic Christmas cheer could spoil the market mood
Technical analysis
A two-week-old ascending trend line joins November’s peak near $46.30 to offer strong immediate support that directs the oil bulls toward March month’s top around $48.75.
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