WTI holds the upside above $ 57 despite bearish API data
- Oil firmer amid trade optimism that overshadows API Crude Inventory build.
- All eyes on trade developments and EIA Crude Stocks data for fresh direction.
WTI (oil futures on NYMEX) holds the higher ground near six-week highs of $ 57.49 reached in the US last session, as the bulls consolidate the recent gains despite a big build in the US private sector Crude Stocks data, per the American Petroleum Institute (API). The API report showed that US Crude Stocks rose by about 4.3 million barrels for the week ended Nov. 1 vs. an increase of 0.592 million barrels seen last.
The black gold rose over a percent on Tuesday, mainly driven by the risk-on market profile amid increased hopes of a US-China trade deal and also on optimism that the US could likely roll back some existing tariffs on Chinese imports. China urged the US to remove some tariffs already imposed before signing phase one of the deal, as cited by Politico a day before. The bulls cheered the news, as easing US-China trade tensions could see a positive economic impact and in turn help lift the global oil demand growth.
Additionally, the upbeat remarks from the OPEC Secretary-General Mohammad Barkindo also collaborate to the upside in the barrel of WTI. Barkindo said that the oil market outlook for 2020 may be brighter than previously forecast, downplaying any need for deeper production cuts. Further, the renewed geopolitical tensions between the US and Iran also keeps the buoyant tone intact around oil prices. The rising US-Iran conflict may trigger supply disruption risks from OPEC’s no 2-oil exporter, Iran.
Attention now turns towards the official US government weekly Crude Stocks data due to be published by the Energy Information Administration (EIA) later on Wednesday at 1530 GMT for fresh direction on the prices. Also, the trade-related headlines will continue to influence the risk trends, eventually impacting the higher-yielding oil.
WTI Levels to watch