WTI drops back below $ 46 on IEA oil outlook, eyes on EIA data

Oil futures on NYMEX brought an end to its 3-day recovery mode and fell sharply lower on Wednesday, as investors digest the bearish API inventory report and IEA monthly oil bulletin.

WTI: Eyes EIA inventory data for fresh impetus

After a sharp fall witnessed overnight, the black gold entered a consolidative mode in Asia, only to meet fresh supply after the IEA monthly oil outlook report got published in European session.

 The International Energy Agency (IEA) said in its monthly oil outlook report published last hour, growth in oil supply next year is expected to outpace a potential rise in demand that will push global consumption above 100 million barrels per day (bpd) for the first time, Reuters reports.

Meanwhile, an unexpected build in the US crude stockpiles data, as reflected in the API weekly crude inventories data released late-Tuesday, also continues to weigh heavily on the prices. The US crude stocks rose by 2.8 million barrels in the week to June 9 to 511.4 million, against a decrease of 2.7 million barrels expected.

Markets now await the highly-influential official US government crude stockpiles data, which will be reported in the NA session. Also, the FOMC decision will be closely eyed for any impact on the USD-sensitive oil. At the time of writing, WTI drops -1.18% to $ 45.91, while Brent slumps -1% to $ 48.25.

WTI technical levels 

A break above $ 46.50/56 (10-DMA/ NY high) could yield a test of $ 47 (round number) beyond which $ 47.50 (key resistance) could be tested. While a breach of $ 45.27/20 (June 9 & 8 low) would expose $ 44.50 (psychological levels), below which downside opens up for a test of $ 43.76 (multi-month lows).