- WTI attempting a recovery after a sharp correction from over six-year highs.
- Concerns over tighter supplies amid OPEC+ fallout underpin the US oil.
- US API weekly crude stockpiles awaited amid risk-on market mood.
WTI (futures on Nymex) is staging an impressive recovery from four-day lows of $72.94, as the bulls look to recapture the $75 level amid an upbeat market mood.
At the time of writing, the US oil rises 1.70% to $74.59, reversing the sharp correction seen on Tuesday from the highest levels since November 2014 at $76.98.
The black gold surged to multi-year highs on concerns over tighter oil supplies unable to match a potential growth in demand, especially after the OPEC and its allies (OPEC+) abandoned the meeting after a failure to reach a deal on the output policy for the third time.
However, the rally to fresh 2021 highs failed to hold up, as sellers returned on profit-taking and resurfacing worries that higher oil price could ramp up inflation, which may temper the global economic recovery.
So far this Wednesday, WTI price draws support from an improvement in the risk sentiment, as the European equities trade in the green alongside the US futures. Also, worries over tighter oil markets continue to provide underlying support to the US oil, as the focus now shifts towards the weekly crude stockpiles report due to be published by the American Petroleum Institute (API) later today.
Subdued trading seen in the US dollar across the board is also boding well for the USD-denominated WTI. Investors await the FOMC minutes for fresh dollar trades, which could eventually have a significant bearing on oil.
