Search ForexCrunch
  • WTI closed in the red for second straight day on Wednesday.
  • EIA’s weekly report showed sharp decline in US crude oil inventories.
  • Investors await fourth-quarter GDP growth data from US.

Crude oil prices gained traction during the American hours on Wednesday and the barrel of West Texas Intermediate (WTI) touched a weekly high of $53.27. However, the risk-averse market environment and the broad USD strength forced WTI to erase its gains and close in the negative territory.

Ahead of the key macroeconomic data releases from the US, WTI is fluctuating in a tight range below $53 and was last seen posting small daily gains at $52.67.

Eyes on US GDP report

The report published by the US Energy Information Administration (EIA) revealed on Wednesday that crude oil stocks in the US declined by nearly 10 million barrels in the week ending January 22. Nevertheless, the rally witnessed in WTI after this report remained short-lived as investors showed no interest in risk-sensitive assets.

Meanwhile, concerns over a shaky recovery in oil demand seem to have resurfaced with China reportedly looking to restrict travel amid the rising number of coronavirus infections ahead of the Lunar New Year holiday.

Later in the session, the US Bureau of Economic Analysis’ advanced estimate for the fourth quarter Gross Domestic Product (GDP) growth will be looked upon for fresh impetus. The US economy is seen as expanding by 3.9% on a yearly basis and a better-than-expected reading could help WTI retest $53 in the second half of the day.

Technical levels to watch for