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Upbeat inventory report adds strength to the supply cut forces as prices are close to $60.

Official oil stock data from EIA and developments surrounding the US-China trade deal could offer fresh impulse.

WTI trades around $59.20 during early Asian sessions on Wednesday. The oil benchmark is close to a four-month high of $59.55. While expectations surrounding supply cuts have mostly been in favor, industry data showing a surprise draw in weekly inventory levels pleased buyers recently. However, challenges to the demand side mainly due to anticipated global economic slowdown are something that weighs on prices. Next up on the trader’s radar will be official EIA release up for publishing at 14:30 GMT today.

Organization of the Petroleum Exporting Countries (OPEC) and its allies, popularly known as OPEC+, recently gathered in Azerbaijan and decided to scrap April meeting. They gave more time till June to take a decision on whether to extend the present supply cuts considering the US sanctions on Iran and Venezuela.

On Tuesday, American Petroleum Institute (API), an industry group, released its weekly crude oil stock report. It mentioned a surprise draw of -2.1 million in inventories to 446.8 million versus market expectations of +0.3 million addition at the end of the week to March 15.

While supply-side forces support bulls, doubts over future demand challenge the sentiment. One key factor contributing to the same is uncertainty surrounding the US-China trade deal. The world’s two largest economies have wrangled over trade terms with counter-tariffs on each other during most of 2018 and have triggered a setback for major economies that were already trying to cope up with political and cyclical challenges. During early 2019, the hope of a trade truce between the US and China offered a sigh of relief to markets but the economies are still far from a final decision.

Looking forward, the official oil stock change report from the US depart of Energy’s Energy Information Administration (EIA) wing will be crucial for WTI traders. The inventory report might follow the API’s footsteps with -0.78 million draw-down number against the previous decline of -3.86 million.

WTI Technical Analysis

WTI traders need to conquer $60.00 round-figure resistance in order to aim for $61.30, $61.80 and $62.00 upside numbers.

Alternatively, a decline under $57.50 can trigger a pullback targeting $57.00 and $56.30 with $58.50 and $57.80 acting as immediate supports.