WTI back above $ 55, but for how long?

• IEA forecasts and API report weigh.
• Attempts recovery on broad USD weakness.
• EIA crude inventory report eyed.

WTI (oil futures on NYMEX) is seen making another recovery attempt above $ 55 mark, as the bulls were rescued by the renewed USD sell-off.

WTI: Near-term risks remain to the downside?

The black gold trims losses, although remains nearly 0.90% weaker on the back of bearish inventory report released by the API late-Tuesday, while IEA downward revision to the global demand growth forecasts for 2017 and 2018 was the main driving force behind the sell-off.

Moreover, risk-off sentiment across the financial markets reflected upon by falling US equities and Treasury yields also exacerbated the pain in the risk asset – oil.

Over the last hours, the oil bulls have found some respite from the extension of the USD sell-off, as the US tax reform uncertainty lingers. A weaker US dollar makes the USD denominated oil cheaper for the foreign buyers.

Focus now shifts towards the official US government crude oil stockpiles report, which will provide fresh insights on the US supply-side scenario amid rising US output levels and rig counts.  At the time of writing, WTI trades -0.85% lower at $ 55.22, while Brent drops -0.80% to $ 61.70.

WTI Technical Levels

Higher-side levels: 55.49/55 (10-DMA/ daily pivot), $ 56 (round figure), $ 56.75 (Nov 14 high).

Lower-side levels: 54.84 (2-week lows), 54.40 (Nov 3 low), 53.64 (classic S2/ Fib S3).