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  • Oil stalls upside amid fresh trade concerns, risk-aversion.
  • Stimulus hopes, Middle East tensions could lend support to oil bulls.
  • Traders await US weekly API Crude Stocks data and fresh trade news.

WTI (futures on Nymex) is seen trading modestly flat ahead of the 56 handle, consolidating the latest uptick to near 56.60 region, the highest level in four days.  

The black gold failed to hold above the 56.50 barrier, as risk aversion returned in Europe amid resurfacing US-China trade fears, with China unhappy over the US sanctions on Huawei. This faded the latest trade optimism after the US Commerce Department granted a 90-day extension to Huawei on Monday. Meanwhile, the US Treasury yields are seen falling sharply lower, keeping the overall market sentiment fragile.

Bullish bias persists ahead of API data

Despite the latest leg down, the barrel of WTI continues to derive support from increased fiscal stimulus hopes from Germany the US, in an effort to boost the economic growth, in turn could help to lift the oil demand growth outlook.

Further, the sentiment around oil was also buoyed by the  signs of tension in the Middle East after the United States called the release of an Iranian tanker unfortunate and warned Greece and Mediterranean ports against helping the vessel, as cited by Reuters.

Attention now turns towards the US weekly Crude Stocks data due to be published by the American Petroleum Institute (API) later today at 2030 GMT for fresh direction on the prices. According to a Reuters poll of seven analysts, crude oil inventories in the United States are seen falling by 1.9 million barrels in the week to Aug. 16.

WTI Levels to watch