WTI uninspired by US stimulus led risk-on, trims gains to test $24

• US stimulus lifts global markets but not oil prices.
• Broad USD slide keeps the downside cushioned in the US oil.
• Eyes on virus updates and EIA crude stocks data for fresh directives.

Easing global growth concerns following the US agreement on the coronavirus stimulus deal did lift the risk sentient, however, failed to boost the recovery momentum in WTI (oil futures on NYMEX), as the rates head back towards the $24 mark.

Despite the rally in the global markets, cheering the US economic package to fight the corona crisis, oil markets still remain wary over its effectiveness in actually stimulating economic growth and in turn the demand for oil, as most governments have announced lockdown to curb the virus spread. Therefore, the upside attempts continue to get sold-off.

Moreover, the ongoing Saudi Arabia-Russia oil price war after the OPEC+ output deal fallout also remains a drag on the black gold. However, the bulls continue to find support from the broad-based US dollar weakness, as markets had already priced-in a US stimulus deal worth $2 trillion.

Further, a decrease in the US crude oil stockpiles over the last week, as suggested by the latest American Petroleum Institute (API) data, also helps keep the upbeat tone alive around the barrel of WTI. The API data showed the US crude inventories fell by 1.2 million barrels in the week to March 20 to 451.4 million barrels, compared with analysts’ expectations for a build of 2.8 million barrels.

Markets continue to gauge the virus impact on the global economy for fresh direction on oil prices while the Energy Information Administration (EIA) weekly crude inventories report could also offer some near-term trading opportunities in the commodity.

WTI technical levels to consider