WTI fails to resist again above $ 56.50, US data in focus
- Oil bulls find support from risk-on European trading.
- Further upside lacks momentum on oil demand growth concerns, firmer USD.
- All eyes on US Durable Goods and Rigs Count data for fresh direction.
The recovery in WTI (futures on Nymex) once again lost legs above the 56.50 level, in the wake of prevalent bearish sentiment, as concerns over oil demand growth outlook continue to weigh.
WTI: Bias leans to the downside
The barrel of WTI staged a solid comeback in the European session but the upside momentum quickly lost traction, as investor sentiment was dampened by the latest comments from the International Energy Agency (IEA) Chief BIrol’s comments. Birol said that the agency was looking to cut the 2019 global oil demand growth forecast if the global economy weakens further.
Moreover, the ongoing US dollar strength against its main competitor, mainly driven by increased safe-haven demand amid US political woes, is likely to keep the recoveries shallow in the black gold while receding fears of Saudi Arabian supply threats also remain a risk to the oil-price rebound.
However, the latest leg up in oil can be attributed to the risk-on action seen in the European markets, as traders cheer Bank of England’s (BOE) dovish expectations and US-China trade optimism.
Markets now eagerly await the US Durable Goods and Baker Hughes Oil Rigs Count data for the near-term trading opportunities in oil.
WTI Levels to watch