WTI fades pullback from weekly lows below $46.00 ahead of the key day
- WTI looks for a clear direction after consolidating the inventory-led losses.
- EIA stockpiles rose the highest since mid-April during the last week.
- Risk catalysts wobble amid Brexit, US stimulus uncertainty, vaccine hopes keep the bulls hopeful.
- ECB, US FDA decision on covid vaccine and US aid package headlines will be important to follow.
WTI wavers around $45.80, up 0.13% intraday, amid Thursday’s Asian trading. In doing so, the oil benchmark fades recovery moves from the weekly low hit on Wednesday’s official inventory reports. While the global market players await the decisions on the key macro issues, oil traders remain silent after a volatile day that closed with no major changes in prices.
Crude oil stocks rose 15.189M barrels last week versus expectations for a drop of 1.424M, per the Energy Institute Administration (EIA). This marks the highest addition to the inventories in eight months. The same dragged the quote to the weekly low.
However, the commodity pared losses afterward as oil trades focus on the news that the US policymakers approved American sale of high-tech weapons to the United Arab Emirates (UAE). The reason could be traced to the UAE’s tussle with Iran. However, the deal will be reviewed by US President-elect Joe Biden.
Recently weighing the quote could be the news that the US blacklists Chinese crime boss and some other diplomats from Beijing in an anti-corruption sanction crackdown. Also, the market’s cautious sentiment ahead of the US approval of the covid vaccine and the ECB decision, not to forget about the US coronavirus (COVID-19) stimulus headlines, challenge the oil buyers off-late.
Other than the stated catalysts, covid numbers and the US dollar moves, which recently have been stopping the commodity buyers, will also be important to watch.
Technical analysis
Wednesday’s doji candlestick above the 12-day-old support line suggests a gradual recovery of oil prices eyeing the monthly high of $46.75. Meanwhile, any downside past-$45.17, comprising the stated support line, will attack the monthly low near $44.00.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
