- WTI holds onto recovery gains.
- The US catalysts seem to drive energy prices more than from the Middle East.
- API data escalated the inventory build, EIA might follow the footprints.
- Coronavirus crisis weighs on the market sentiment, expectations of stimulus lure the buyers.
While taking positive clues from the US, not to forget hopes of further stimulus, WTI gains 4.5% to $25.00 on NYMEX ahead of the European open on Wednesday. The black gold earlier ignored a jump in inventory numbers from the American Petroleum Institute (API) as well as risk-off while expecting a demand push due to the likely stimulus form the key economies.
While the latest report from Goldman Sachs dims the importance of this week’s OPEC+ meeting, Reuters’ report that the US oil senators will hold talks with Saudi Arabian officials and push for the output cut seems to have helped the energy benchmark off-late.
The Saud-Russia rift has delayed the key this week’s meeting of the Organization of the Petroleum Exporting Countries (OPEC) and its allies including Russia, mostly known as OPEC+, which earlier weighed on the oil prices.
Also weighing on the importance of the OPEC+ meeting could be comments from Iran that signal the need for a clear, consensual outcome. Previously, US President Donald Trump’s comment suggesting ‘automatic’ reduction in output helped the quote.
Oil traders may now look for further clues concerning the producers’ move for fresh impulse while coronavirus (COVID-19) fears could keep the recovery under check. On the data front, the US Energy Information Administration (EIA) will release the official inventory data on 14:30 GMT, expected 10.133M versus 13.834M prior.
Technical analysis
Sustained trading beyond 10-day SMA near $23.30 enables the buyers to aim for the monthly high surrounding $28.80. While $20.00 could lure the sellers past-$23.30, bulls could aim for $30.00 during the successful rise above $28.80.
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