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  • Oil sees a relief rally in tandem with global stocks while tightening supplies underpin.
  • Global growth concerns could limit the upside, as focus shifts to the US API crude stockpiles data.

The bulls regained control in the European session, now driving WTI (oil futures on NYMEX) to the highest levels so far this week above the 59.50 barrier, as all eyes remain on the 60 psychological mark heading towards the API weekly fuel stocks report due later today at 2030 GMT.

The sentiment around black gold remains underpinned by increased expectations of tighter global supplies in the first quarter of this year, with the OPEC supply cuts likely to get deeper and the US sanctions Iran and Venezuela already posing supply risks.

However, the key driver behind the latest leg higher in WTI can be attributed to the increased demand for the risk assets such as the equities, Treasury yields, oil etc., as markets cheer upbeat development on the US-China trade negotiations. Sources: China said to plan more US pork imports amid trade talks – Bloomberg

Looking ahead, looming US recession fears will continue to have a negative bearing on the oil markets that could be offset by a potential draw in the US weekly crude inventories due to be published by the API later in the NA session.

WTI Technical Levels