Oil Price Forecast: WTI drops despite lower API build, but still above $25.00
- WTI June Futures ignore upbeat API data, extend pullback from the weekly top.
- Trade war fears, risk of virus resurgence check energy buyers.
- EIA data, qualitative catalysts will be eyed.
WTI Futures on NYMEX paid a little heed to price-positive API data while declining to $25.30, currently around $25.34, at the end of Tuesday’s trading session. Even so, the black gold marks 4.97% gains on a day as Asian markets open for Wednesday.
The weekly release of private inventory data from the American Petroleum Institute (API) suggests a build of 7.64 million barrels versus the previous addition of 8.44 million barrels into the stockpiles.
The energy benchmark earlier surged to the weekly high of $26.23 backed by voluntary output cuts from Saudi Arabia, Kuwait and the UAE. Also supporting oil prices was the recent re-opening of major economies.
Though China’s tussle with the US and Australia, as well as fears of the spike in coronavirus (COVID-19) cases due to the economic restart, keeps the tab on the quote.
Additionally, the Fed policymaker’s recent efforts to talk down the negative interest rate also fear the energy traders.
Moving on, the oil traders will keep eyes on the trade/virus updates amid fears of further weakening in the demand. To gauge the supply, the weekly official Crude Oil Stocks Change from the Energy Information Administration (EIA), prior 4.059 million barrels, will be the key to watch.
Technical analysis
A downward sloping trend line from early-April, currently around $26.30, seems to offer an immediate upside barrier for the black gold ahead of the previous month top near $29.15. On the downside, 50-day SMA near $23.26 becomes nearby support ahead of $22.00 mark near to 10-day SMA.