- WTI fails to respect the previous day’s bearish Doji.
- The energy benchmark pays a little heed to API data, shrugs off coronavirus fears for the time being.
- Iran escalates its nuclear arsenal, Aussie GDP came in positive while Asian governments announce measures to ward off COVID-19 economic impacts.
WTI rises to $47.90, up 1.19%, by the press time of early Wednesday. The black gold recently benefited from risk reset in Asia after policymakers extend drives to counter the negative implications of the coronavirus (COVID-19). Also supporting the oil prices was news Iran whereas weekly API data failed to grab major attention.
As per the data from the American Petroleum Institute (API), for the week ended on February 28, private oil stockpiles increased 1.69 million barrels versus the previous rise of 1.3 million barrels.
Even so, the oil traders paid a little heed to the inventory data as South Korea and Hong Kong registered moves to tame COVID-19 while the World Bank Group also announced immediate support package to counter the deadly virus.
Also supporting the energy benchmark could be the early-day news from the Financial Times that relied on the International Atomic Energy Agency (IAEA) to suggest increasing threats of Iran’s nuclear activity.
That said, Japan’s NIKKEI register 0.44% gains to 21,180 while stocks in China and South Korea are also positive. However, the US 10-year treasury yields remain under pressure around the record low of 0.906 while taking rounds to 0.973% by the press time.
It’s worth mentioning that speculations are on the rise that the Organization of the Petroleum Exporting Countries (OPEC) meeting, scheduled for March 05/06, is less likely to deliver any increase in production cuts.
Looking forward, traders will keep eyes on the official inventory release for the week ended on February 28, to be released by the Energy Information Administration (EIA) on 15:30 GMT. The forecast suggests the stockpiles to rise by 3.333 million barrels versus 0.452 million barrels prior.
Technical Analysis
With the bearish Doji on Tuesday’s daily chart, buyers will wait for the sustained move beyond $48.75 to aim for 21-day SMA near $50.40. Until then, the fears of the return of $46.00 can’t be ruled out.
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