WTI extends the bounce off recent lows, targets $56.00 ahead of EIA

• WTI approaches the $56.00 mark on Wednesday.
• The API reported a nearly 6M barrel build late on Tuesday.
• The weekly report on US supplies by the EIA is due later.

Prices of the barrel of the West Texas Intermediate have regained the smile on Wednesday and are now trading closer to the $56.00 mark.

WTI rebounds from 3-week lows

The barrel of WTI is reversing two consecutive daily pullbacks after dropping and testing fresh multi-week lows in sub-$55.00 levels earlier in the session.

Indeed, increasing concerns stemming from the US-China trade war front and persistent social unrest in Hong Kong have hurt the sentiment in the risk-complex and dragged crude oil prices to fresh lows earlier on Wednesday, where dip-buyers appear to have emerged.

Also weighing on traders’ mood, it is highly unlikely that Russia could support deeper oil output cuts at the OPEC meeting next month, according to earlier news.

Still on the bearish side, the API reported an almost 6M-barrel build during last week ahead of the EIA’s weekly report on US crude supplies due later today.

What to look for around WTI

The US-China trade developments remain the almost exclusive driver of crude oil prices for the time being along with increasing concerns surrounding the situation in Hong Kong. Further out, it seems the OPEC+ is biased towards leaving the status quo unchanged regarding the ongoing oil output cuts agreement at its meeting in December. Concerns around crude oil prices also find extra grip on the persistent build in US oil supplies, while production remains on the rise.

WTI significant levels

At the moment the barrel of WTI is gaining 0.54% at $55.65 and faces the next hurdle at $56.36 (21-day SMA) seconded by $57.38 (2000-day SMA) and then $58.17 (monthly high Nov.18). On the other hand, a breakdown of $54.85 (monthly low Nov.20) would expose $53.71 (low Oct.31) and finally $50.99 (monthly low Oct.3).