- WTI seesaws inside nearly 30-pip range, recently off range support.
- Colonial Pipeline eyes resumption by the end of the week, White House cites no issues with fuel supply after the cyberattack.
- Traders recheck odds favoring Fed’s easy money policy, turn cautious ahead of Wednesday’s US inflation.
- API inventories, risk catalysts can direct near-term oil moves.
WTI picks up bids near $64.90, bouncing off the immediate range support, during the initial Asian session trading on Tuesday. In doing so, the oil benchmark struggles to justify mixed fundamentals amid a lack of major catalysts, not to forget cautious mood before the week’s key US data.
Colonial Pipeline isn’t a threat to the US oil supply”¦
The weekend cyber attack on the US East Coast’s key oil pipeline, allegedly by the Darkside group, failed to push the Biden government for repealing Jones Act, which requires goods moved between US ports to be carried by ships built domestically and staffed by US crews, per Reuters. The White House also defies the halt in the oil flow while saying, per CNN, ” there are no issues with fuel supply as officials worked urgently to ascertain the scope and fallout of a ransomware attack on the Colonial Pipeline.”
It’s worth mentioning that the officials from the stated pipeline also mentioned that the flow will be resumed, at least half of it, by this weekend, which in turn pushed back the oil buyers.
Elsewhere, the US dollar picked up bids after markets researched for more clues to turn down the fears of the Fed’s refaltion and rate hike. As a result, risk aversion ahead of Wednesday’s US Consumer Price Index (CPI) could be witnessed during the dull start to the week.
It should, however, be noted that the progressing nuclear talks between the US and Iran, as well as hopes of further stimulus from America, not to forget upbeat vaccine updates, back the risk-on mood.
Against this backdrop, S&P 500 Futures struggle for a clear direction after Wall Street closed in the red.
Looking forward, the weekly private industry data of the US oil inventories, namely API Weekly Crude Oil Stock, prior -7.688M, will be important for the day whereas risk headlines will also be the key for near-term trade direction. Further, China’s inflation figures shouldn’t be ignored as the dragon nation is the world’s largest oil user.
Technical analysis
While the $66.15-30 area restricts WTI crude oil’s short-term upside, the $63.70-55 region comprising multiple levels marked since late February test bears. However, the overall uptrend established since early April can’t be ruled out.
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