WTI retraces majority of daily rebound, trades around $20.50 ahead of API data
- OPEC output reportedly increased by 90K barrels per day in March.
- US and Russia will start discussions on stabilization of oil market.
- Coming up: API Weekly Crude Oil Stock data from US.
The barrel of West Texas Intermediate (WTI) dropped to its lowest level in more than 18 years on Monday at $19.25 before staging a rebound on Tuesday. After coming within a touching distance of the $22 mark, the WTI lost its traction and erased the majority of its daily gains and was last seen trading at $20.50, still adding 1.3% on the day.
Oil recovery struggles to gather momentum
Earlier in the day, the data published from China showed that the economic activity in the manufacturing and the service sectors expanded in March following February's deep contraction to ease concerns over a protracted drop in energy demand.
Additionally, a Kremlin spokesman said that US President Donald Trump and President Putin agreed to start discussions on the stabilization of the oil market during Monday's phone conversation and helped the WTI cling to its recovery gains.
However, a Reuters survey on Tuesday showed an increase in the OPEC oil output in March as Saudi Arabia boosted its production following the collapse of the OPEC+ output cut agreement. With the data revealing that the OPEC output rose by 90,000 barrels per day (bpd) to 27.93 million bpd in March, the WTI pushed lower in the American trading hours.
Later in the day, the American Petroleum Institute's (API) Weekly Crude Oil Stock data will be looked upon for fresh impetus.
Technical levels to watch for