WTI refreshes multi-month high above $53.00 on upbeat API stockpile data, focus on EIA figures

• WTI jumps to a fresh high since February 2020 after the private inventory report.
• API data suggests a draw of 5.821 million barrels in oil inventories versus -1.663M prior.
• Risk-on mood, weaker US dollar also favored the upside momentum.

WTI remains on the front foot after the American Petroleum Institute (API) data propelled the quote to a fresh multi-day high of $53.44 during the early Asian session on Wednesday. The energy benchmark also benefited from the upbeat sentiment and US dollar weakness ahead of the official inventory data from the US Energy Information Administration (EIA).

As per the latest API Weekly Crude Oil Stock data for the week ended on January 08, the stockpile dropped 5.821 million barrels versus -1.663 million barrels. It should be noted that the private inventories have been depleting off-late, which in turn exert downside pressure on the expectations of the official EIA data. That said, forecasts suggest EIA Crude Oil Stocks Change recover from -8.01M to -2.72M for the stated period.

Other than the inventories, the market’s cautious optimism also favors the black gold. Recently upbeat comments from the Fed policymakers, suggesting strong economic recovery during the second half of 2021, join expectations of a heavy fiscal stimulus from US President-elect Joe Biden and the covid vaccine updates favor risks despite the coronavirus (COVID-19) woes.

Also positive for the energy benchmark were the US dollar’s latest declines. The US dollar index (DXY) snapped a three-day winning streak while marking the heaviest losses in over a month on Tuesday as markets’ upbeat mood trimmed the greenback’s safe-haven demand.

Moving on, clues over the US stimulus and virus vaccines will accompany the official inventory data and the US inflation figures to determine near-term WTI moves.

Technical analysis

While late-2019 lows near 51.00 can easily restrict WTI’s pullback moves, sellers may avoid entries unless witnessing a clear break below an ascending trend line from November 02, at $49.15 now.