WTI pulls away from five-month highs, settles above $42

• Crude oil prices rose on upbeat US data on Wednesday.
• Sharp drop in US crude oil stocks provided a boost to WTI.
• Focus shifts to China trade data, US NFP report.

Crude oil prices rose for the fourth straight day on Wednesday and the barrel of West Texas Intermediate (WTI) reached its highest level since early March at $43.50. Although the WTI retreated in the late American session, it settled at $42.20 with a daily gain of 1.18%, or 49 cents.

US data lifted crude oil prices on Wednesday

Earlier in the day, the data published by the ISM showed that the economic activity in the US’ service sector expanded at a strong pace in July with the ISM Services PMI rising from 57.1 in June to 58.1. This report revived hopes of a steady recovery in energy demand and helped the WTI push higher. 

Moreover, the US Energy Information Administration’s weekly report revealed that crude oil stocks declined by 7.3 million barrels in the week ending July 31st and provided an additional boost to crude oil prices.

Meanwhile, the broad-based selling pressure surrounding the greenback allowed the WTI’s bullish momentum to remain intact throughout the day.

On Friday, Trade Balance data will be featured in the Chinese economic docket. Investors will be paying attention to oil import figures of the world’s second-biggest oil consumer. Later in the day, the US Bureau of Labor Statistics’ Nonfarm Payrolls (NFP) report will be watched closely by the market participants as well.

Technical levels to watch for