WTI pares intraday losses, back above mid-$68.00s ahead of EIA report
- Doubts about the outlook for the global fuel demand prompted fresh selling around WTI.
- The risk-off impulse benefitted the safe-haven USD and further weighed on the commodity.
- Traders look forward to the official EIA report on US crude inventories for a fresh impetus.
WTI crude oil witnessed aggressive selling during the early North American session and dived to the $67.65 region in the last hour, albeit recovered a bit thereafter.
The commodity failed to capitalize on the previous day's goodish rebound from one-week lows, instead met with some fresh supply on Thursday and dropped nearly $2 from the daily swing highs. Worries that the fast-spreading Delta variant of the coronavirus could dent the global fuel demand continued acting as a headwind for oil prices.
The market concerns were further fueled by the US Energy Information Administration (EIA), which lowered its 2021 global oil demand forecast on Wednesday. This, along with a report from the Energy Information Administration, indicating that crude drawdown for the week ended September 3 was smaller than expected, weighed on the black gold.
Meanwhile, COVID-19 woes and expectations for an imminent Fed taper announcement took its toll on the global risk sentiment. This, in turn, benefitted the US dollar's relative safe-haven demand, which was seen as another factor that undermined dollar-denominated commodities, including oil, and contributed to the intraday slide.
Despite the negative factors, the commodity, so far, has managed to defend strong horizontal support near the $67.65 region. WTI crude oil quickly bounced back to the $68.50-60 region as traders now look forward to the official EIA report on US crude oil inventories for a fresh impetus. Apart from this, the US price dynamics might provide some impetus.
Technical levels to watch