West Texas Intermediate (WTI) experienced a brief dip below $77.00 per barrel on Tuesday, followed by a modest rebound that underscored the challenges facing the US Crude Oil market amid broader bearish sentiment.
According to the American Petroleum Institute (API), the weekly Crude Oil stocks saw a further decline of 3.9 million barrels compared to the previous week’s drop of 4.44 million barrels. This contraction surpassed expectations of a 2.47 million barrel decrease, highlighting ongoing reductions in US supplies. The API’s inventory report provided some support to WTI prices during the late US trading session, although overall market momentum remains sluggish, favoring a downward trend.
Earlier in the year, increased Crude Oil demand from China helped buoy prices, but concerns over a slowing Chinese economy amid global growth deceleration have tempered these expectations. With prospects for a robust recovery in Chinese fuel demand diminishing, market support for Crude Oil prices has waned. Geopolitical tensions in the Middle East, which previously fueled concerns about potential disruptions to global Crude Oil production, have failed to significantly impact market dynamics.
Following a drop to around $76.25 on Tuesday, WTI stabilized, but attempts to rally above $77.50 were unsuccessful, indicating a bearish bias in intraday trading. While short-term momentum may have peaked, there is potential for a rebound towards the 200-hour Exponential Moving Average (EMA) currently at $79.80.
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