WTI again bounces off 100-DMA as API data, risk-on play their roles

• API data, risk resetting portray another pullback from 100-day SMA.
• EIA data and trade headlines will be the key to watch.

With the latest shift in risk sentiment and decline in API inventories, WTI buyers again lurk around 100-day SMA by trading near $59.20 ahead of the UK open on Thursday.

Absence of major negative headlines from the US-China trade front triggered recent risk reset in the global financial markets.

The 10-year US Treasury yield, the macro benchmark for risk tone, recovered from lowest since September 2017 to 2.270% by the press time.

Adding to the upside sentiment could be a negative number of the US weekly crude oil stock. The oil inventory level, as conveyed by the private industry survey of American Petroleum Institute (API), for the week ended on May 24 slipped -5.265 million barrels versus previous addition of 2.400 million barrels.

Furthermore, Geopolitical tension between the US and Iran haven’t yet calmed and continues to signal future energy supply crunch.

Looking forward, Energy Information Administration’s (EIA) official US crude stocks data for the week ended on May 24 will be the key for oil traders. The inventory number may slip by -0.80 million barrels compared to an earlier increase of 4.74 million barrels.

Technical Analysis

Unless breaking 100-day simple moving average (SMA) level of $58.50, chances of the energy benchmark’s rise to 200-day SMA level of $60.10 seem brighter. In a case where prices rally past $60.10, $60.85 and $62.20 could gain buyers’ attention.

Meanwhile, a daily close under $58.50 can quickly drag the quote down to 38.2% Fibonacci retracement of present year rise, at $57.30, whereas $55.70 and 50% Fibonacci retracement near $54.40 might entertain bears afterward.