WTI tracks Brent higher, eyes $ 58 ahead of EIA data

• Supported by bullish API report.
• Hopes of an extended pipeline shutdown underpins.
• The US EIA crude inventory report in focus.

Having fallen nearly 2% on Tuesday, WTI (oil futures on NYMEX) is seen extending its gradual recovery mode into Europe, as the bulls remain expectant of a big draw in the US crude stockpiles report due on the cards later today. 

WTI headed to $ 58.55, 5-day tops?

WTI has reversed almost 50% of yesterday’s decline so far this Wednesday, as the overnight crude inventory data from API offered the much-needed respite to the bulls. The US crude stockpiles fell by 7.4 million barrels last week, reflecting a much-bigger-than-expected drop, the API data showed.

Moreover, the latest reports of a key North Sea pipeline shutdown boosted the recovery in Brent, in turn, offering support to its American rival, WTI. INEOS, one of the world's largest manufacturers of chemicals and oil products, reported that Britain's Forties crude oil pipeline remains closed, as a number of repair options are under consideration.

Furthermore, broad-based US dollar weakness on the back of the latest political setback for the Trump administration also collaborates to the renewed uptick in the black gold. A weaker US dollar makes the USD-denominated commodity cheaper for the buyers in foreign currencies.

At the time of writing, WTI gains +0.91% to $ 57.65 while Brent rallies +1.35% to 64.19 levels.

WTI Technical Levels

Higher-side levels: $ 57.92 (Dec 5 high), $ 58.55 (5-day tops), $ 59 (round number)

Lower-side levels: $ 57.36/33 (5 & 10-DMA),$ 56.50 (psychological levels), $ 55.86 (50-DMA)