WTI deepens its drop as risk-off continues apace.
Ignore bullish API crude stocks data as the US breaks the $71 barrier.
Weekly crude stockpiles from the US Energy Information Administration (EIA) are being monitored for new information.
In the European session, WTI (futures on Nymex) broke out of its Asian bearish consolidative phase to the negative, reaching $70.78 for the first time since June 18.
At the time of writing, US oil is making a slight recovery, having reclaimed the $71 level and presently trading at $71.08, down about 1.80% on the day.
The sell-off from Tuesday’s high of $76.98, the highest since November 2014, continues unabated, as the sellers maintain control amid deepening risk aversion across the financial markets, fueled primarily by renewed concerns about the resurgence of coronavirus cases worldwide, with Asia-Pacific countries the worst-affected.
Investors are nevertheless concerned of the new covid wave and its potential influence on the nascent global economic recovery, which might jeopardize oil demand growth. Tumbling Treasury rates and US equities futures indicate a shift in risk sentiment away from higher-yielding assets like oil and towards safe-haven assets like gold and the yen.
WTI shrugs off a drop in US weekly oil stocks, as published by the American Petroleum Institute (API) late Wednesday, amid a risk-off mentality. According to API statistics, crude oil stocks in the United States decreased by 7.98 million barrels last week.
For new near-term trading possibilities in oil, the focus now switches to the official US government crude inventories data anticipated to be issued by the Energy Information Administration (EIA)./n
