WTI stays pressured towards $83.00 ahead of API inventories
- WTI keeps pullback from seven-year high, retreats of late.
- Saudi Arabia outlines Mideast Green initiative, shows readiness to ease supply constraints.
- US-Iran tussles could renew on chatters over Syrian done attack.
- Risk-on mood, geopolitics may challenge oil bears, weekly API stockpiles eyed.
WTI holds lower grounds following a U-turn from a fresh multi-day high, pressured around $83.25 during Tuesday’s Asian session. In doing so, the black gold struggles to justify headlines from the Middle East, as well as risk-on mood, amid the US dollar rebound.
The US Dollar Index (DXY) refreshed three-week lows before posting the heaviest daily jump in two weeks on Monday. The greenback gauge seems to have benefited from the market’s cautious sentiment ahead of Thursday’s advance estimation of the US Q3 GDP amid hawkish Fedspeak and mixed data.
On the other hand, market sentiment improved headlines from China and concerning Evergrande joined hopes of US stimulus, backed by US President Joe Biden and House Speaker Nancy Pelosi.
More recently, doubts that Iran was behind the drone attack on the US airbase in Syria should have probed the oil sellers. However, Saudi Arabia’s “aims to reach "net zero" emissions of greenhouse gases, mostly produced by burning fossil fuels, by 2060,” per Reuters, challenge the energy buyers.
Even so, "We would need prices to rise to $110 /bbl to stifle demand enough to balance the market deficit we currently see in 1Q22 given our expectation that OPEC+ continues on the current path of +0.4 mb/d per month increases in quotas," said Goldman Sachs per Reuters.
Amid these plays, Wall Street closed positive and the S&P 500 Futures print mild gains by the press time.
Moving on, WTI traders should wait for the weekly oil stockpile data from the American Petroleum Institute (API), prior 3.294M, for fresh impulse. Though, qualitative factors and the US dollar moves will also be important to watch.
Technical analysis
10-DMA precedes monthly support line, respectively around $82.30 and $81.90 to restrict short-term WTI downside. Meanwhile, bulls need a daily closing beyond November 2012 lows near $84.10 to excel further.