WTI shrugs off EIA data amid weaker USD, geopolitical concerns
- WTI recovers from weekly low on broad greenback weakness after the Fed decision.
- News of fire in Texas refinery weighs over China’s downbeat activity numbers.
- A higher than anticipated EIA stockpile report deviated from private inventory data.
With the broad US Dollar (USD) weakness fueling commodities and Antipodeans, WTI bounces off six-day low to $55.30 amid initial trading hours on Thursday.
While markets seem largely ignored higher than anticipated inventory data after the US Federal Reserve’s (Fed) latest monetary policy meeting, sluggish prints of China’s official activity numbers also have little impact during the early Asian session.
The reason could be traders’ dovish outlook concerning the United States (US) Fed’s three back-to-back rate cuts and anticipation of downward price pressure. The same managed to conquer the Fed Chairman’s efforts to talk down the easy money policy.
It’s worth mentioning that the USD has a negative correlation with commodity prices as they are all termed in the greenback on international bourses.
Additionally, Reuters’ news that a pump seal leak triggered fire in terminal area of Citgo Corpus Christi Texas Refinery added strength to the energy benchmark’s recent pullback. Furthermore, renewed tension between the US and Turkey, after the US lawmakers pushed for sanction concerning offensive in Syria, also strengthens the buyers.
Elsewhere, news surrounding the US-China trade deal has also been unimpressive recently as the US Secretary of State Mike Pompeo criticized China’s ruling Communist Party (CCP) in his latest appearance.
Oil traders will now keep an eye over the economic calendar while waiting for Friday’s headlines employment data from the US and weekly release of Baker Hughes US Oil Rig Counts.
Technical Analysis
Despite bouncing off 21-day Exponential Moving Average (EMA), WTI needs to cross 50-day EMA level of $55.30 on a daily closing basis to challenge a 100-day EMA level of $56.00 and monthly top surrounding $57.00. Meanwhile, an ascending trend line since October 10, at $54.40, seems to limit the black gold’s immediate declines.