- WTI stays depressed while extending three-day downtrend to the lowest since February 22.
- API Weekly Crude Oil Stock grew past-1.026M prior to 7.356M for the week ended on February 26.
- OPEC+ raised doubts on the latest price rally.
- EIA data, risk catalysts and further updates from OPEC+ will be the key.
WTI remains on the back-foot for the fourth consecutive day while declining to $59.40 during the initial Asian session on Wednesday. The energy benchmark recently dropped on the private inventory data while comments from the OPEC+ and an absence of the risk-on mood earlier weighed on the black gold.
As per the latest industry stockpile data from the American Petroleum Institute (API), the weekly inventories of oil rose 7.356 million barrels versus the previous addition of 1.026 million barrels.
The downbeat data for WTI helped the commodity to stretch earlier losses piled due to the comments from the Organization of the Petroleum Exporting Countries (OPEC) and its alliance, popularly known as OPEC+. The oil cartel raised doubts on the recent rally in the oil prices while suggesting it as a market-player-driven rise on widening backwardation of major benchmark crudes and increasing net-long positions in the financial markets.
Read: OPEC: Oil price recovery caused by financial players
Also negatively affecting the energy benchmark could be the absence of market optimism as traders await the week’s key data/events. Among them, a speech from Fed Chair Jerome Powell, US President Joe Biden’s $1.9 trillion stimulus, UK Budget and American employment data for February are the crucial ones.
Talking about the oil-specific figures, weekly official inventory numbers from Energy Information Administration (EIA), expected -1.85M versus +1.285M, will be the key to watch. Also important is the monthly figures of ISM Services PMI for February, the market forecast suggests intact figures of 58.7.
Given the lack of motivation for the bulls, coupled with the latest fundamental challenges to the run-up and technical breakdown, WTI is likely teasing oil bears. It’s worth mentioning that Thursday’s OPEC meeting, wherein the producers are likely suggesting more supplies, can also lure the sellers.
Technical analysis
Having breached the monthly support line and 21-day SMA, respectively around $62.20 and $59.60, WTI is likely to stretch the latest south-run towards an ascending trend line from early November 2020, at $57.50 now.
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