WTI battles $43.50 during post-API run-up, eyes EIA data
- WTI keeps the previous day’s upside momentum probing the monthly high.
- API Weekly Crude Oil Stocks dropped below -4.264M prior to -4.524M during the week ended on August 21.
- Hurricanes disturbing Persian Gulf’s oil output, risk-tone stays positive.
- EIA data, trade/virus headlines are in the spotlight.
WTI prints 0.15% gains while taking rounds to $43.50/55 ahead of Wednesday’s Tokyo open. The energy benchmark surged to the highest in three weeks, flashing the biggest gains in two months, the previous day.
Other than fears of hurricane Laura that thwarts oil production in the Gulf of Mexico, upbeat inventory numbers from the American Petroleum Institute (API) also favored the bulls. Also on the positive side could be the market’s optimism concerning the US-China trade deal and hopes to counter the coronavirus (COVID-19) amid global push for the remedy.
The headlines suggesting the British government’s funding for the University of Cambridge’s COVID-19 vaccine trials offered the latest push to the market’s risk-tone sentiment. Earlier during the day, traders awaited more clues on the Trump administration’s rush to vaccine and plasma treatment.
Amid all these catalysts, the S&P 500 Futures gain 0.10% to 3,446 after flashing the record high of 3,448.75 on Tuesday.
While headlines concerning the hurricane Laura will be the key, official readings of the weekly stockpiles by the Energy Information Administration (EIA) will also be watched closely. Forecasts suggest that the EIA Crude Oil Stocks Change will be -3.833M versus -1.632M prior for the week ending on August 21.
It’s worth mentioning that the trade/virus headlines will be an additional burden on the oil watchers while forecasting the near-term moves.
Technical analysis
A sustained break of the three-week-old falling trend line, currently around $43.10, pushes the buyers to challenge the monthly top near $43.65 in search of February month’s low around $44.00.