WTI battles 100-DMA as bulls take a breather around two-week top amid sluggish markets

• WTI pauses after three-day uptrend, refreshes intraday low at the latest.
• Higher-than-expected EIA inventory draw, risk-on mood favored bulls earlier.
• Market sentiment dwindles ahead of the key US data/events, Jackson Hole tops all.

WTI crude oil drops to $67.85 in the latest consolidation move during Thursday’s Asian session. The energy benchmark rose for three consecutive days before the buyers stepped back. Risk-on mood and the US dollar weakness joined upbeat inventory details to favor the black gold but cautious sentiment ahead of the key US data/events probe the bulls of late.

The US Dollar Index (DXY) dropped during the last four days to tease a one-week low of around 92.82 at the latest. That said, the greenback gauge bears the burden of the recently easing odds favoring the Fed’s tapering, backed by downbeat US economics, Durable Goods Orders was the last.

Also weighing on the greenback, and favoring the WTI bulls, was the risk-on mood led by the covid vaccine optimism and US policymakers’ passage of the $3.5 trillion budget plan. On the same line was news that representatives of Wall Street and China will meet to soften the terms of equity trading. Furthermore, chatters over faster jabbing in the Asia–Pacific and news of more covid vaccine approvals in the pipeline to the US Food and Drug Administration (FDA) brighten the market’s mood as well.

Elsewhere, the weekly release of the EIA Crude Oil Stocks Change also favored the commodity buyers as the figures dropped more than -2.683M expected to -2.979M for the period ended on August 20.

It’s worth mentioning that the Delta covid variant woes and China’s crackdown on equities challenge the oil bulls. Alternatively, geopolitical tension in the Middle East adds to the price-positive catalysts. However, cautious mood ahead of important catalysts, portrayed by the inaction of the US stock futures and Treasury yields, challenge the WTI moves.

Looking forward, the US Personal Consumption Expenditure (PCE) Inflation data and second reading of the US Q2 GDP will be more important as markets brace for Fed Chair Jerome Powell’s speech, up for publishing on Friday.

Technical analysis

Although a clear break of the monthly resistance line keeps WTI buyers hopeful, a 100-DMA level around $68.00 needs to be smashed properly for a bullish recipe aiming to match the mid-August swing high surrounding $69.40–45. Failures to do so should recall the $65.00 level, comprising lows marked during July and on August 06, to the chart.