WTI slumps to three-week lows below $71 mark ahead of EIA data
- WTI extends correction as risk-off remains at full steam.
- US breaches the $71 mark, ignore upbeat API crude stocks data.
- US EIA weekly crude stockpiles eyed for fresh cues.
WTI (futures on Nymex) has broken its Asian bearish consolidative phase to the downside in the European session, reaching the lowest levels since June 18 at $70.78.
At the time of writing, the US oil is staging a minor comeback, having recaptured the $71 mark to now trade at $71.08, down nearly 1.80% on the day.
The correction from the highest levels since November 2014 at $76.98 on Tuesday remains unabated, as the sellers retain control amid deepening risk aversion across the financial markets, mainly fuelled by renewed concerns over the resurgence of coronavirus cases worldwide, with Asia-Pac nation the worst-hit.
Investors remain wary over the new covid wave and its impact on the nascent global economic recovery, which put the oil demand growth prospects at risk. Tumbling Treasury yields and US equity futures show signs of a shift in the risk sentiment towards safe-havens such as gold and yen at the expense of higher-yielding assets such as oil.
Amid risk-off mood, WTI shrugs off a drawdown in the US weekly crude stocks, as reported by the American Petroleum Institute (API) late Wednesday. The API data showed that the US inventories of crude oil fell by 7.98 million barrels last week.
The focus now shifts towards the official US government crude inventories data due to be published by the Energy Information Administration (EIA) for fresh near-term trading opportunities in oil.
WTI technical levels to consider