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  • WTI retreats after dropping the most in two weeks.
  • API Weekly Crude Oil Stock grew +0.436M versus -3.608M prior.
  • Antitrust lawsuits on OPEC output cuts, covid resurgence in Asia add to the bearish move.
  • EIA inventories, risk developments will be the key.

WTI’s corrective pullback from one-month top fizzles as the black gold drops back towards $62.00, currently down near $62.40, amid the early Wednesday morning in Asia. While demand fears and the OPEC-linked news weighed down the oil benchmark the previous day, the black gold’s latest declines could be traced from downbeat inventory data from the private survey.

American Petroleum Institute (API) reported a surprise build of 0.436 million barrels of oil into the Weekly Crude Oil Stock, versus the previous depletion of 3.608 million barrels, for the week ended on April 16.

The inventory data from an industry player exert additional downside pressure on the energy benchmark that earlier marked the heaviest losses in two weeks as covid resurgence in Asia clouded oil demand hopes. Also negatively affected the commodity prices was a headline from Reuters suggesting the  US  House Judiciary Committee has passed a bill that would open OPEC to antitrust lawsuits over production cuts.

It should be noted that a sell-off in equities also join the drop in WTI while the US dollar’s bounce-off seven-week low offered an extra worry for the black gold traders.

Looking forward, the commodity dropped to the negative price this time before a year but the conditions have changed a bit and hence those fears are distant. However, challenges to the economic recovery raised by the COVID-19 fresh wave and increasing inventories may weigh on WTI prices.

As a result, oil traders will keep their eyes on the official inventory data, EIA Crude Oil Stock Change, expected -2.860M versus -5.889M prior, for fresh impulse. Also important will be the covid developments and other risk headlines.

Technical analysis

Although failures to cross the $63.70-80 horizontal resistance back WTI bears, multiple tops marked during late March and 50-day SMA, respectively around $61.80-70 and $61.50, test the latest declines.