- Risk-off, Gulf ending voluntary cuts weigh on oil bulls.
- US crude stockpiles expected to fall last week.
- Next of relevance is the US API crude stocks data.
Following a solid recovery seen in the Asian session on Tuesday, WTI (July futures on Nymex) flipped to losses and gave away over $1.5 to test the 37 mark.
At the press time, the US oil drops 2.50% to trade at 37.26. The sharp pullback in the black gold was triggered by a fresh risk-aversion wave that gripped the European markets. Escalating Australia-China tensions appeared to be the key catalyst behind the souring market mood.
Meanwhile, looming US-China concerns and the ongoing surge in coronavirus cases globally continue to dampen the investor sentiment, thereby, weighing on the higher-yielding oil.
Further, the barrel of WTI remains disappointed by the Gulf countries retracting on its voluntary oil output cuts pledge, especially after the OPEC+ agreed last Saturday to extend the current output cuts extension by a month.
Earlier in the Asian session, the price attempted a recovery on the narrative of the economic recovery, mainly taking the lead from the rally in Wall Street overnight. Meanwhile, expectations of a draw in the US crude stockpiles last week also offered support to the buyers.
According to a preliminary Reuters poll, the US crude stockpiles are estimated to have fallen by 1.5 million barrels last week. The focus now remains on the American Petroleum Institute (API) weekly crude stocks change data for the next direction in the prices.
WTI technical levels to watch
“The oil benchmark seems to have been capped between $38.15 horizontal support and $39.20 support-turned-resistance. In a case of either side breaks, a 200-HMA level of $36.38 and $40.00 round-figures will gain the market’s attention. It should also be noted that the monthly high around $40.60 and June 01 low near $34.45 are some extra filters to check while observing the oil price moves,” FXStreet’s Analyst Anil Panchal noted.
WTI additional levels
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