WTI: Off intraday lows, but still depressed above $11.00, API data eyed
- WTI bounces off four-day lows amid fresh short-covering moves.
- Upbeat comments from Moody’s, the pullback in the US dollar seem to have offered the floor.
- Demand-supply imbalance, storage worries keep bears hopeful.
- API data, virus updates in the spotlight.
WTI June futures gain the fresh bids from intraday low of $10.64 while rising to $11.25, down $12.00 on a day, during the pre-European session on Tuesday. Although dwindling demand-supply matrix, amid the coronavirus (COVID-19) crisis, keep a lid on the black gold, the recent positive comments from Moody’s seem to put a floor beneath the commodity’s declines.
The global rating giant recently said that China's support measures will prop up growth and jobs in the near term. Also supporting the energy benchmark could be the US dollar pullback ahead of the European session. The US dollar index (DXY), which measures the greenback versus major currencies, trims the early-day bounce to just 100.0857 by the press time.
Earlier during the day, a statement from Fitch spread pandemic fears and dragged the commodity down. The rating agency mentioned that the effects of coronavirus on banks in APAC (Asia-Pacific Countries) will be more severe than those of a normal cyclical downturn.
It should also be noted that the news suggesting the US producer’s storage crisis, as well as negative prices of the put options for WTI’s June contract, have also exerted downside pressure on the oil prices during the Asian session.
US President Donald Trump cited upbeat conditions to restart the economy while also alleging China for the virus spread. On the other hand, easing lockdowns in Australia and New Zealand have also played their roles to direct risk moves. While portraying the same, the US 10-year Treasury yields remain mildly positive near 0.66% with stocks in Asia flashing mixed signals.
For the near-term direction, the weekly release of private inventory data from the American Petroleum Institute (API), up for publishing at 20:30 GMT, will be important to watch. The industry stockpile for the week ended on April 24 might follow the footsteps of the previous addition of 13.226 million barrels into the inventories.
Technical analysis
The 23.6% Fibonacci retracement of April 21 fall, near $10.25, followed by a $10.00 psychological magnet become the keys for sellers ahead of the previous week’s low near $6.50. On the upside, an immediate falling resistance line near $13.00 guard the energy benchmark’s short-term recovery moves.