- WTI remains pressured after flashing the heaviest loss in a month the previous day.
- API stockpile grew 8.731 million barrels versus an expected drop of 4.8 million barrels.
- The rivalry between the world’s top two economies adds pressure on the energy markets.
- EIA data, US-China story will be the key to follow for fresh impulse.
WTI fails to carry the pullback from $32.00 while taking a U-turn from $32.50 to currently around $31.77 amid the initial Asian session on Thursday. While the tension between the US and China, coupled with the coronavirus (COVID-19) woes keep weighing on the black gold, weekly inventory data from the American Petroleum Institute (API) offered the latest losses to the energy benchmark before its recovery.
As per the latest API figures for the week ended on May 22, the US Weekly Crude Oil Stock surged by 8.731million barrels versus the previous draw of 4.8 million barrels.
Talking about the US-China story, the US House of Representatives recently passed a bill to sanction Chinese diplomats involved in the Xinjiang case. Even if the bill already crossed the senate a few days back, the move strengthens calls for additional sanctions on the dragon nation, as signaled by US President Donald Trump on early-Wednesday.
Also citing fears of further political tension between the world’s two largest economies is the news suggesting Hong Kong’s loss of special trading status with the US.
In a reaction to the Trump administration’s moves, Beijing’s embassy recently suggested that it will retaliate to the US meddling in the Hong Kong issue.
Against this backdrop, the market’s risk-tone heavies with the S&P 500 Futures parting ways from its Wall Street benchmark and drop 0.15% to 3,030.
While the official US Crude Oil Stocks Change from the Energy Information Administration (EIA) will be the key for oil traders, trade/political headlines from the US and China shouldn’t also be missed. Forecasts suggest the EIA stockpiles recover from -4.983 million barrels prior to -2.5 million barrels, which if matched could add downside pressure on the black gold.
Technical analysis
Unless providing a daily close below Friday’s low near $30.90, bulls remain hopeful to confront a 100-day EMA level of $35.40.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD consolidates gains below 1.0500 amid weaker US Dollar
EUR/USD holds gains below 1.0500 in European trading on Monday, having recovered from its two-year low of 1.0332. This rebound is due to a sell-off in the US Dollar and the US Treasury bond yields amid a US bond market rally. The focus shifts to German data and ECB-speak.
GBP/USD flirts with 2600 on the road to recovery
GBP/USD is trading close to 1.2600 early Monday, opening with a bullish gap at the start of a new week. A broad US Dollar decline alongside the US Treasury bond yields on appointment of a fiscal hawk Scott Bessent as the Treasury Chief helped the pair stage a solid comeback.
Gold price sticks to heavy intraday losses amid risk-on mood, holds above $2,650 level
Gold price witnessed an intraday turnaround after touching a nearly three-week high, around the $2,721-2,722 area and snapped a five-day winning streak at the start of a new week. Bets for slower Fed rate cuts also drive flows away from the non-yielding yellow metal.
Elections, inflation, and the bond market
The Federal Reserve believes inflation is no longer a concern for consumers and the time has come to ensure the rate of change of prices does not decline any further.
Read more
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.