WTI remains pressured around weekly low after welcoming bears the previous day.
Cautious optimism about China, receding fears of Russia-induced supply crunch fears weigh on Oil price.
Anxiety ahead of top-tier central bankers’ speeches, weekly Oil inventory data also tease energy bears.
WTI crude oil remains on the back foot for the second consecutive day as bears prod the weekly low, marked the previous day, amid early Wednesday morning in Europe. That said, the black gold registers a 0.30% intraday loss while poking $67.85 by the press time.
While tracing the key catalysts, mixed headlines about the economic transition in the US and China joins the Sino-American tension, as well as the US Dollar’s rebound, gain major attention. Additionally, the commodity trader’s cautious mood ahead of the key central bankers’ speeches at the European Central Bank (ECB) Forum in Sintra also exerts downside pressure on the energy benchmark.
the economic optimism backed by upbeat US data and the risk-positive headlines from China, mainly surrounding the People’s Bank of China’s (PBoC) USD/CNY fix and chatters about more stimulus, defend the market’s optimists.
However, the fresh fears surrounding the US-China tension and cautious mood ahead of Federal Reserve (Fed) Chairman Jerome Powell’s speech at the European Central Bank (ECB) Forum in Sintra exert downside pressure on the risk appetite and the black gold.
That said, US President Joe Biden said late Tuesday that China has enormous problems. His comments were joined by the Wall Street Journal (WSJ) news saying, “The Biden administration is considering new restrictions on exports of artificial intelligence chips to China, as concerns rise over the power of the technology in the hands of US rivals, according to people familiar with the situation.”
Previously, headlines suggesting Asian lobbyists are advocating for easier rules for Chinese equities’ overseas listing and comments from Premier Li Qiang joined the People’s Bank of China’s (PBoC) lower-than-expected fixing of the USD/CNY price to tease the Oil. Further, the US Dollar selling by major Chinese state banks, per Reuters, also allowed the Aussie pair to remain firmer.
Above all, receding geopolitical fears from Russia and fears of economic slowdown weigh on the WTI crude oil.
Alternatively, the weekly prints of the American Petroleum Institute’s (API) Oil inventory data came in as -2.408M versus -1.246M prior to put a floor under the Oil Price. On the same line is the global Oil producers’ push for more output cuts and macroeconomic jitters.
Moving on, the weekly official oil inventory data, released by the Energy Information Administration (EIA), expected -1.467M versus -3.83M prior can entertain the Oil traders. Additionally important will be the updates from the ECB Forum.
Although the monthly horizontal support of around $67.50 restricts the short-term downside of the WTI crude oil, the 21-DMA hurdle of around $70.30 caps the immediate upside of the black gold.