- WTI steps back from the highest in more than eight months to revisit the sub-45.00 area.
- API inventories rose less than 4.174M during the week ended on November 20.
- Saudi Arabia confirms Iran’s hand in the Houthi attack.
- Risk-on sentiment stops the bears with eyes on EIA data.
WTI drops a few cents to $44.87 after the American Petroleum Institute (API) released weekly oil inventory reports at the start of Wednesday’s Asian session. The black gold filled the early-March gap while rising to the eight-month high the previous day as global markets cheered optimistic signals from the US.
As per the industry data, conveyed by the API, US Weekly Crude Oil Stock eased to 3.8 million barrels versus the previous addition of 4.174 million barrels during the week ended on November 20. Although the figures eased from the previous, market consensus backed a contraction in the actual outcome and hence the oil buyers stepped back after the release.
Even so, hopes of further stimulus and the upbeat news from the coronavirus (COVID-19) race keep favoring the oil bulls. The commodity’s rush to the multi-day top the previous day mainly took clues from the White House where US President-elect Joe Biden got formal powers to receive the President’s Daily Brief and the collection of classified intelligence reports.
The upbeat outcome of AstraZeneca’s results of vaccine trials and chatters that Janet Yellen will be the next Treasury Secretary also favored the energy buyers. Further, news from the Arabiya that the Saudi Cabinet Iran supported Houthi Military to carry out terrorist operations offered additional strength to the WTI prices.
Looking forward, oil bulls will keep their eyes on the official inventory data from the Energy Information Administration (EIA) up for publishing at 15:30 GMT on Wednesday. Forecasts suggest a draw of 0.333 million barrels during the week ended on November 20 versus the previous addition of 0.768 million barrels.
Technical analysis
A sustained close beyond the August high of $43.86 will keep the WTI buyers hopeful of attacking March’s high of $48.74.
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