WTI in a phase of consolidation near $ 64.50, eyes EIA data
- Unperturbed by DXY selling.
- Bearish API report weighs.
- Focus shifts to US EIA crude supplies data.
WTI (oil futures on NYMEX) eased from near three-year tops reached at $ 64.86 in the overnight trades, as the sentiment was dented by a rise in the US crude and gasoline stockpiles, which re-ignited oversupply worries.
The API report showed late-Tuesday that the US crude inventories rose by 4.8 million barrels in the week to Jan. 19 to 416.2 million, ending nine straight weeks of drawdowns. Gasoline stocks climbed by 4.1 million barrels.
Moreover, a bout of profit-taking cannot be ruled as one of the factors behind the retreat in prices, as markets seek to lock in gains after the recent upsurge and ahead of the US EIA crude inventory report.
Despite the correction, the black gold continues to derive support from the OPEC-Russia oil output cuts deal extension while healthy global economic growth outlook also keeps the demand for oil underpinned.
More so, oil prices also cheer the recent comments from the Saudi Oil Minister, calling for extending the cooperation between the OPEC and non-OPEC producers beyond 2018 to boost oil prices further.
Meanwhile, traders also digest the latest remarks from the Russian Energy Minister Novak amid broad-based US dollar weakness, as attention turns towards the official US government numbers on the crude stockpiles due on the cards later today. At the time of writing, WTI trades modestly flat at $64.47 while Brent steadies around $69.70.
WTI Technical Levels
The resistances are aligned at $64.89 (3-year tops) ahead of $65 (psychological levels) and 65.49 (classic R2/ Fib R3). On the downside, supports are located at $63.99/85 (10 & 5-DMA), $63.61 (classic S2) and $63.17 (20-DMA).