Rising global supply worries and firmer DXY weighs down on oil.
Focus shifts to EIA crude data to confirm the bearish API crude inventories report.
WTI (oil futures on NYMEX) seems to have caught a fresh bid-wave in the European session, having reversed a dip below the $ 66 mark, although the bounce looks shallow amid persistent worries over rising global oil production. The output levels in the US, Russia, Saudi Arabia and Kazakhstan are seen on the rise lately, dampening the investors’ sentiment.
More so, the latest Bloomberg report citing a Russian source, as saying that Russia is planning to propose the OPEC and its other allies to return their production to Oct 2016 levels.
Further, oil prices also remain weighed by the bearish API crude inventory report released late-Tuesday. The API data showed that the US crude oil inventories rose by 830,000 barrels in the week to June 8, to 433.7 million.
Meanwhile, broad-based US dollar buying amidst expectations of a hawkish Fed outcome also keeps the bearish pressure intact on the black gold. A stronger US dollar makes the USD-denominated oil more expensive for the foreign buyers.
The latest leg higher in the barrel of WTI can be mainly attributed to the IEA’s monthly oil report, which highlighted that Iran and Venezuela oil output could slump by almost 30 percent due to US sanctions.
Looking ahead, all eyes remain on the US government official crude supplies report and FOMC decision for fresh direction on the prices.