- Unexpected US stocks build, risk-off downs oil.
- OECD downbeat outlook also renders oil negative.
- Focus on EIA Crude Stocks data and Fed projections.
WTI (July futures on Nymex) has bounced-off the daily low of 37.78 but is not out of the woods yet heading into the US Crude Stocks Change data due to be published by the Energy Information Administration (EIA) later on Wednesday at 1430 GMT.
At the time of writing, the US oil drops 2.65% to 37.97, having failed several attempts to sustain at the multi-month highs reached on Monday.
The downside bias in the black gold is on the back of an unexpected rise in the US crude and fuel stockpiles last, as reflected by the latest American Petroleum Institute (API) data released late Tuesday.
The API data showed that the US oil stocks climbed 8.4 million barrels in the week to June 5 against expectations of a draw of 1.7 million barrels.
Further, broad risk-aversion ahead of the Federal Reserve (Fed) monetary policy decision also keeps the demand elusive for the higher-yielding oil. Meanwhile, ongoing US-China spat also continues to weigh on the market mood.
Adding to the weakness in the barrel of WTI, the Organization for Economic Cooperation and Development’s (OECD) painted a gloomy outlook for the global economy in 2020 while dismal Chinese inflation figures also acted as a catalyst for oil’s decline.
WTI technical levels to watch
“Bearish MACD also favors the odds of further downside towards the monthly support near $36.95. Should the bears refrain from respecting the short-term key support line, May 26 high near $34.90 could offer intermediate halt ahead fetching the quote to sub-$31.00 area. Meanwhile, $40.00 round-figure and the weekly high near $40.61 might keep the bulls away during the pair’s U-turn towards the north. Given the commodity prices rally past-$40.61, March 06 low near $41.22 could lure the bulls,” FXStreet’s Analyst Anil Panchal noted.
WTI additional levels
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