WTI falls back below $ 54 ahead of EIA data

• Oil sellers return amid Europe risk-off, as global growth worries weigh.
• Downside remains capped on bullish API report, ahead of EIA data.

Having hit fresh four-week lows just ahead of the 53 handle on Tuesday, WTI (futures on Nymex) extended its steady recovery mode only to meet fresh supply in Wednesday’s European trading.

The black gold failed to resist above the 54 handle and fell sharply to near 53.60 after a renewed risk-aversion wave gripped the European markets, in the face of rising global economic slowdown fears. Thus, the oil market panicked, fretting over the likely negative impact the dwindling global growth would have on the oil demand outlook.

Further, broad-based US dollar rebound amid increased safe-haven flows also collaborated to the latest leg down in the barrel of WTI. However, the sellers are seen catching a breath over the last hour, as the bullish Crude Stocks data from the American Petroleum Institute (API) continue to lend support. The API data showed late-Tuesday, the US crude stocks fell last week by 5.9 million barrels, against expectations for an increase of 1.6 million barrels, per Reuters.

Markets now await the Energy Information Administration’s (EIA) weekly oil inventories report due later today at 1430 GMT for the next direction in oil prices.

WTI Levels to watch