- WTI trims part of its losses on Tuesday, rising 0.80% in the American session.
- US EIA stockpiles shed 7.06 million barrels last week, fueling a jump in oil prices.
- China’s slower-than-expected growth rate and the Iran nuclear deal held back the rise in oil prices.
Western Texas Intermediate (WTI) prices They ranged in a meager session, after US stockpiles triggered a rally in oil prices as the US EIA released its weekly report illustrating that demand remains strong. At the same time, the US is evaluating Iran’s proposals for a nuclear deal.
Meanwhile, WTI is trading at $87.84 bps, above its opening price, posting gains of 0.85% after hitting a daily low of $85.90.
WTI rises on the decline in US reserves
Sentiment deteriorated since the start of the European session. European stocks ended lower, while US equities fell. USD rises, underpinned by investor appetite for safe-haven assets, with the dollar index hitting a fresh three-week high around 106,943, though at time of writing it is at 106,752, up 0.27%.
The US EIA report showed inventories fell by 7.06 million last week, while exports rose as European buyers substituted oil from Russia. For his part, the new secretary of the Organization of Petroleum Exporting Countries (OPEC), Haitham Al Ghais, was confident that world demand for oil will increase by almost 3 million barrels per day, in 2022, via Bloomberg.
Apart from this, concerns that the Chinese economy could grow at a slower pace are keeping oil market participants uneasy. Chinese Premier Li Kequiang demanded local officials, who account for 40% of the Chinese economy, to tighten growth measures after softer-than-expected industrial production and retail sales.
Therefore, the outlook for WTI is tilted slightly to the downside, as other news points to lower demand but higher supplies, adding to the downward pressure on oil prices.
Technical levels
Source: Fx Street
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