WTI hits fresh three-week lows below $ 55 on US-China risks, EIA eyed

• Oil attempts a tepid bounce from sub-55 levels, will it last?
• US’ Hong Kong bill intensifies US-China political tensions, dents risk.
• Focus on US-China trade/ political news and US EIA Crude Stocks data.

WTI (oil futures on NYMEX) is making minor recovery attempts from three-week lows of 54.86 reached last hour, although remains in the red zone for the third straight on Wednesday.

The black gold breached the 55 handle after the risk-off action in Europe intensified, as the European traders hit their desks and reacted negatively to the overnight news that the US Senate passed a resolution supporting human rights in Hong Kong.

The US’ Hong Kong bill, however, aggravated the concerns over the likely US-China trade deal prospects and triggered a fresh spell of risk-aversion across the financial markets, with the European stocks nearly 0.80%-1% and Treasury yields losing 5bps or about 3% so far. In times of market unrest and panic, markets sell-off the risk asset such as oil to seek safety in the US dollar, gold etc.

More so, a stronger greenback makes the US dollar-denominated more expensive for the buyers in foreign currencies. The US dollar index flirts with three-day highs of 98.02, up +0.12% on the day.

Further, the barrel of WTI remains pressured by rising US crude supplies, as reflected by the latest American Petroleum Institute (API data that showed late Tuesday, the US crude inventories rose by 6 million barrels in the week to Nov. 15 to 445.9 million.

Attention now turns towards the official US government inventory data from the Energy Information Administration (EIA), due later today at 1530 GMT, for fresh trading impetus. Also, in focus remains the FOMC minutes that will have a significant impact on the dollar trades, eventually impacting the USD-sensitive oil.

WTI Levels to watch