WTI hits fresh weekly highs above $ 59 ahead of EIA data
- Rallies on reports that US rigs evacuated, falling US crude stockpiles.
- Broad US dollar correction also underpins the upside momentum.
- Focus on EIA crude stocks data amid US-China trade talks, Powell’s testimony.
WTI (futures on Nymex) is seen building up on the recent bullish momentum, rallying 2% so far this Wednesday, underpinned by the bullish American Petroleum Institute (API) weekly crude inventories report and the US rigs evacuation.
According to Reuters, “major producers began evacuating and shutting in production in the Gulf of Mexico as a tropical disturbance may become a storm later on Wednesday or Thursday”. Therefore, expectations of a potential disruption in the crude supplies supported the black gold.
Meanwhile, the API data showed that the US crude inventories dropped by 8.1 million barrels in the week to July 5 to 461.4 million against expectations for a decrease of 3.1 million barrels.
Moreover, a profit-taking drop in the US dollar across its main competitors also collaborates to the ongoing upside in the barrel of WTI. A weaker US dollar makes the USD-denominated oil cheaper for foreign buyers.
Markets look to readjust their USD positions ahead of the key event risk, the Fed Chair Powell’s testimony that could have a major impact on the dollar trades, eventually impacting oil prices.
From a broader perspective, the sentiment around the commodity remains buoyed amid OPEC supply cuts extension, escalating US-Iran tensions and resumption of the US-China trade talks.
All eyes now remain on the official crude stocks data from the US government’s Energy Information Administration (EIA) due later today at 1430 GMT for near-term trading opportunities.
Levels to watch