WTI: Colonial Pipeline restart, USD strength probe bulls below $66.00

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  • WTI snaps three-day winning streak, extends pullback from weekly top.
  • Colonial Pipeline begins restart operations following the cyberattack, Israel Defense Forces tweet rockets fired from Gaza.
  • US dollar jumped on higher-than-feared April CPI, rally in US Treasury yields.
  • Downbeat EIA inventories add to the bearish signals, greenback moves eyed.

WTI stands on a slippery ground while taking offers near $65.50, down 0.27% intraday, amid the initial Asian session trading on Thursday. In doing so, the oil benchmark drops for the first time in a week as challenges to demand join hopes of extra supplies to battle the oil bulls.

US dollar strength stands out the bearish catalysts including hopes of normal supplies from the key Colonial Pipeline and downbeat stockpile data from the Energy Information Administration (EIA). On the contrary, OPEC’s demand forecast joins the geopolitical tension in the Middle East to help the energy buyers.

The US dollar index (DXY) jumped the most in May after Consumer Price Index (CPI) rallied to 2008 levels. The shoot in inflation figures downplays the US Federal Reserve’s (Fed) attempt to placate market bears suggesting hardships for easy money.

After a six-day shutdown, Colonial Pipeline begins restart operations on late Wednesday. However, the firm mentions that it will take “several days for the fuel delivery supply chain to return to normal.”

On the same line, the latest stockpile data from the American Petroleum Institute (API) and EIA portray an easing draw for the week ended on May 07. That said, the latest figures from the official source EIA marks a depletion of 0.427 million barrels in the inventories versus -2.817 million forecast and 7.9 million barrels of the previous draw.

Elsewhere, Israel-Palestine tussles escalate after Israel killed Hamas commander, which in turn pushed the US to send an envoy to the Middle East. However, the conditions remain grim as Israel Defense Forces tweets rockets fire from Gaza to central Israel.

Given the lack of major data/events in Asia, oil traders will keep their eyes on the US dollar moves as the greenback may consolidate some gains on fresh news. Though, WTI bulls are likely to have a tough day retaking the controls until a major war outbreak in Gaza.

Technical analysis

Another failure to cross the $66.30 hurdle, restricting the black gold’s daily closing since early March, directs WTI sellers toward 10-day SMA near $65.00.

 

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