WTI oscillates at six-week low near $103.00 on gas tax chatters ahead of US PMIs, EIA data

• WTI remains pressured around multi-day low, down for the second consecutive day.
• Concerns surrounding Biden’s gas tax relief, recession fears join downbeat API data to favor bears.
• Preliminary US PMIs for June, EIA inventories eyed for fresh clues.

WTI crude oil prices fade bounce off intraday low, retreating towards the $103.00 during Thursday’s Asian session. In doing so, the black gold drops for the second consecutive day after poking the lowest levels in six weeks the previous day.

The energy benchmark’s latest weakness could be linked to the bearish weekly inventory data from the American Petroleum Institute (API), as well as US President Joe Biden’s push for gas tax relief and recession fears.

As per the API Weekly Crude Oil Stock for the period ended on Jun 17, stockpiles rose 5.607 million barrels versus an increase of 0.736 million barrels the previous week.

Talks that US President Biden will announce gas tax relief by the end of the week weighed on the oil prices as energy producers are already struggling with the higher supplies and fears of a slowdown in the demand due to the recession woes, especially from China.

It’s worth noting that the covid and geopolitical concerns have already rang an alarm for the economic slowdown and challenged the black gold prices earlier. Also drowning the energy prices are the recently hawkish central bankers.

That said, the market’s risk-off mood exerts additional downside pressure on the oil prices. While portraying the mood, Wall Street managed to pare the day-start losses but ended Wednesday with mild losses whereas the US 10-year Treasury yields marked the biggest daily fall in a week by ending the day at around 3.16%. That said, the S&P 500 Futures drop 0.50% by the press time.

Moving on, the official weekly oil inventory data from the Energy Information Administration (EIA), 1.956 M prior, will direct short-term oil prices. Additionally, the US S&P Global PMIs for June and the second round of Fed Chair Jerome Powell’s Testimony will also be important to watch for fresh directions.

Technical analysis

A daily closing below the yearly support line, now resistance around $106.85, directs WTI crude oil prices towards May’s low near $97.20.