WTI regains $111.00 on surprise API inventory draw, fears of EU’s Russian oil embargo
- WTI picks up bids to reverse pullback from seven-week top.
- API Weekly Crude Oil Stock registered surprise fall of 2.445M for the week ended May 13.
- Market sentiment improves as Fedspeak refrains from 75 bps idea, firmer macros, China news also favors buyers.
- Updates over European oil embargo on Russia, coronavirus and EIA stockpiles will be important for fresh directions.
WTI takes the bids to regain $111.00, paring the losses from a seven-week high flashed recently, as oil buyers cheer API inventories, as well as fears of more supply crunch, during Wednesday’s early Asian session.
That said, the weekly prints of the American Petroleum Institute’s (API) Crude Oil Stock data for the period ended on May 13 flashed a depletion of 2.445M barrels versus the previous addition of 1.618M.
Other than the API inventories, news from Reuters that the European Commission will on Wednesday unveil a 210 billion euro plan for how Europe can end its reliance on Russian fossil fuels by 2027 favored oil buyers of late. “To wean countries off those fuels, Brussels will propose a three-pronged plan: a switch to import more non-Russian gas, a faster rollout of renewable energy, and more effort to save energy, according to draft documents seen by Reuters,” said the news.
Elsewhere, China’s hopes of overcoming covid-led lockdowns in Shanghai and recently firmer data in the US and the Eurozone, coupled with the OPEC+ failures to meet the monthly target output, also favor the WTI crude oil buyers. Additionally, a softer USD offered an extra strength to the black gold prices.
Alternatively, inflation fears and hawkish comments from the key central bankers keep a tab on the energy prices. On the same line is global energy producers’ rejection to cut output.
Moving on, the official weekly oil inventory data from the Energy Information Administration (EIA), expected 1.533M versus 8.487M prior, will direct short-term oil prices. Also important are the risk catalysts including China's covid conditions, rate hike concerns and geopolitical woes.
Technical analysis
An upward sloping trend line from late March, around 111.40 by the press time, appears the key short-term hurdle for WTI buyers ahead of aiming for a late March swing high near $115.85. Meanwhile, sellers will wait for a clear break of the 10-DMA, around $106.80 by the press time.
Reprinted from FXStreet_id,the copyright all reserved by the original author.
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