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WTI reverses the pullback from multi-day high to attack $46.00

  • WTI bounces off $45.51, near the highest since March 06 flashed the previous day.
  • Weekly data suggested EIA marked a surprise draw in inventories, Baker Hughes signaled an increase in rig US counts.
  • The US sanctions four companies from Russia, China concerning Iran’s missile program.
  • US dollar performance, risk news will be the key.

WTI stays positive near $45.90 during the initial hours of Thursday’s Asian session. In doing so, the energy benchmark extends the latest recovery moves from $45.51 amid fears of geopolitical tension between the US and Iran.

The black gold earlier witnessed pullback from the fresh high since early March, flashed during the previous day, as the US rig count numbers came in price negative. It should, however, be noted that the US dollar weakness joined a surprise draw in the official inventory data to please the oil bulls with a fresh high in nearly nine months, before stepping back from $46.30.

As per the updates from Reuters, the US recently blacklisted four companies from Russia and China while accusing them of promoting Iran’s missile program. The news combats the latest Baker Hughes US Oil Rig Count that grew past-231 to 241. Earlier on Wednesday, the official Crude Oil Stocks Change figures, published by the Energy Information Administration (EIA), suggest a surprise draw of 0.754 million barrels versus 0.127 million barrels of expected additional into the inventories.

Other than the oil-related data/events, US dollar weakness, mainly on downbeat figures at home, also favored the commodity. Though, the coronavirus (COVID-19) fear probe the energy buyers who are trying to cheer the vaccine hopes. Against this backdrop, Exxon Mobil said, per the Wall Street Journal (WSJ), “The fallout from the coronavirus pandemic to linger for much of the next decade.” The oil major has also trimmed its expectations for future oil prices for each of the next seven years by 11% to 17%, per the news.

Moving on, oil traders should keep their eyes on the risk news amid a lack of major data/events. However, the US dollar weakness and vaccine development, coupled with the likely US-Iran tussle, can favor the oil benchmark ahead of the next week’s OPEC meeting.

Technical analysis

Unless declining back below August month’s high of $43.86, WTI bulls are well directed towards the March 2020 peak close to $48.75.