• WTI remains on the back foot around multi-day low, sidelined of late.
  • US pushes allies towards releasing strategic oil reserves, China responds the first.
  • EIA, API inventories couldn’t please bulls, neither the USD pullback.
  • Demand-supply concerns, Fedspeak and greenback moves in focus.

WTI bears the burden of the US-led push for the SPR (Strategic Petroleum Reserve) release during early Thursday. That said, the oil benchmark drops over 1.0% to refresh 1.5 month low while taking rounds to $76.85 ahead of the European session.

Earlier in Asia, Reuters came out with the news saying, “The Biden administration has asked some of the world’s largest oil-consuming nations to consider releasing some of their crude reserves in a coordinated effort to lower prices and stimulate the economic recovery.”

Following that, China National Food and Strategic Reserves Administration announced to have carried out the work of releasing crude oil reserves. On the same line was Japan’s Chief Cabinet Secretary Hirokazu Matsuno who urged oil-producing countries to increase output.

In addition to the supply push, an absence of any geopolitical concerns in the Permian basin that previously propelled the black gold also weigh on the WTI crude oil prices. It’s worth mentioning that the fresh covid woes in Europe and fears of the tighter monetary policy exert additional downside pressure on the commodity prices.

On the contrary, surprise draws in the weekly official oil inventory data from the US Energy Information Administration (EIA), -2. 101M versus expected +1.398M. Earlier in the week, oil stocks change figures from the American Petroleum Institute (API) also eased to 0.655M versus an expected addition of 1.55M.

Other than the inventories, the US dollar pullback should have also favored the WTI bulls but haven’t. Hence, the commodity traders await clarity over near-term moves, which in turn highlights more chatters over the supply increase and rate hikes for fresh impulse.

Technical analysis

Given the clear downside break of the 50-DMA level of $78.10 amid bearish MACD signals, WT remains directed towards July’s peak of $76.40 before challenging the 100-DMA surrounding $73.80.

This article was originally published by Fxstreet.com.Read the original article here.

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