WTI sticks to gains around $52.00 ahead of API, FOMC

After climbing to fresh 19-month tops just above the $55.00 mark on Tuesday, the barrel of West Texas Intermediate has surrendered part of those gains and returned to the $52.00 neighbourhood today.

WTI attention to API, FOMC

Crude oil prices are recovering some ground lost after yesterday’s pullback backed by hopes of a decrease in US oil inventories at today’s weekly report by the API (to be released later in NA session).

The solid performance of the greenback – reaching fresh 14-year tops on Tuesday when tracked by the US Dollar Index – has prompted oil traders to fade the recent spike above the $55.00 handle and shed around $3 to current levels, all supported by auspicious results from the US manufacturing sector.

In the meantime, USD will remain in centre stage in light of the release of the ADP employment report (173K exp.) later and the publication of the FOMC minutes, with consensus expecting a hawkish message. On another front, traders remain vigilant on the news coming from both OPEC and non-OPEC countries regarding the implementation of the December agreement to limit the oil production in order to stabilize markets.

The case for strong crude oil prices has been reinforced by the latest CFTC report, showing that speculative net longs have climbed to the highest level since early July 2014.

WTI levels to consider

At the moment the barrel of WTI is gaining 0.54% at $52.51 and a breakout of $55.24 (2017 high Jan.3) would aim for 62.58 (high May 6 2015). On the other hand, the immediate support lines up at $52.11 (low Jan.3) followed by $51.66 (high Dec.9) and finally $49.61 (low Dec.8).