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  • White House comments, bearish API report weigh down on oil.
  • Focus on EIA data and FOMC for the next direction.

WTI (oil futures on NYMEX) is seen fluctuating between gains and losses around the 72 handle so far this Wednesday, as the traders await the EIA fuel stock data and Fed outcome for the next direction.

Despite Brent hovering near 4-year tops, the US oil retreated, mainly due to Washington’s assurance late-Tuesday that the US oil market will be well supplied before the US imposes additional sanctions on the US, starting November 4.

Moreover, a slightly upbeat tone seen around the US dollar across its main peers heading into the FOMC decision also keeps the oil bulls at bay. A stronger US dollar makes the USD-denominated oil more expensive to the foreign buyers. The Fed is likely to hike rates by 25bps and could signal another rate hike in December this year.

Furthermore, the bearish API crude inventory report also dented the sentiment around the black gold. The API data showed that the US crude inventories rose by 2.9 million barrels in the week to Sept. 21 to 400 million, compared with analyst expectations for a decrease of 1.3 million barrels.

All eyes now remain on the official US government crude stockpiles data due to be published by the EIA later today at 1430 GMT while the Fed decision at 1800 GMT will also have a major impact on the oil trades.

WTI Technical Levels

Resistances: $ 72.83 (mid-May tops), $ 73 (round number), $ 73.50 (psychological level).

Supports: $ 71.54 (5-DMA), $ 70.73 (Sept 20 low), $ 70.52 (10-DMA).