WTI bears catch a breath despite downbeat API data

• WTI June extends the latest pullback moves amid risk reset.
• API data registered another worrisome inventory build.
• EIA data, efforts to tame the oil price drop will be in focus.

While extending its recoveries from below $10 area, the lowest since 1999, WTI’s June contract registers 5.6% gains to $13.75 as soon as Tokyo opens for trading on Wednesday.

In doing so, the black gold ignores a heavy inventory build figures by the American Petroleum Institute (API). The industry data for the week ended on April 17 suggest that the oil stockpiles increased 13.226 million barrels versus the previous readings of 13.143 million barrels.

The reason could be traced from the recent recovery in the market’s risk-tone, mainly due to the upbeat comments from the US and the Middle East.

Not only the US President Donald Trump and Treasury Secretary Steve Mnuchin but Iraqi oil minister also tried to placate the energy bears.

As a result, the US 10-year Treasury yields catch a break around 0.575%, after declining six basis points (bps) the previous day, whereas the US stock futures also register mild gains of under 0.50%.

Moving on, oil traders may pay attention to the headlines suggesting the US economic restart and oil majors’ actions to tame the slump. On the economic calendar, weekly official Crude Oil Stocks Change from the Energy Information Administration (EIA), expected 16.133 million barrels versus 19.248 million barrels, will be the key to watch.

Technical analysis

Unless successfully crossing 21-day SMA near $20.77, buyers are less likely to enter the trade, not to mention the possibilities of witnessing $29.00 back on the charts. On the contrary, sellers will reclaim the throne once the oil prices slip below $10.00.