WTI grinds higher around mid $110.00s on surprise API inventory draw, G7 actions

• WTI seesaws around an eight-day high as bulls seek more clues.
• API Weekly Crude Oil Stock dropped 3.799M for the week ended on June 24.
• G7 agreed to cap Russian oil prices but the capacity limits of major producers favor oil buyers.
• Delayed release of EIA stockpile data, risk catalysts will be important for fresh impulse.

WTI remains on the front foot, grinding higher around $110.50-60 during the initial Asian session on Wednesday. The black gold rose during the last three consecutive days as supply-crunch fears battle the Group of Seven (G7) announcements to cap the Russian oil prices.

That said, the energy benchmark’s latest uptick could be linked to the surprise draw in weekly inventory data from the industry source. The weekly prints of the American Petroleum Institute’s (API) Crude Oil Stock data for the period ended on June 24 flashed a reduction of 3.799 million barrels versus the previous addition of 5.607M, not to forget expectations of -0.106M.

It’s worth noting that the G7 pressure on Russia failed to tame the WTI crude oil prices amid chatters that major oil producers are already operating at the peak of their capacities and hence further output increase is less likely.

“G7 leaders have agreed to explore imposing a ban on transporting Russian oil that has been sold above a certain price, aiming to deplete Moscow's war chest,” said Reuters. The news also mentioned, “Saudi Arabia and the UAE have been seen as the only two members of the Organization of the Petroleum Exporting Countries with spare capacity to make up for lost Russian supply and weak output from other member nations.”

It should, however, be noted that the fears of economic slowdown challenge the upside momentum but the latest easing of travel restrictions in China appears to have helped the black gold buyers.

Moving on, the already-delayed release of the official weekly oil inventory data from the Energy Information Administration (EIA) for the week ended on June 17 and 24 will be important for oil traders to watch. Additionally, the OPEC meeting on Thursday and risk catalysts, as well as the central bankers’ speeches at the ECB Forum are some extra catalysts to take note of for clear directions.

Technical analysis

The 21-day EMA level surrounding $110.75 challenges WTI buyers even if the quote managed to cross the 50-day EMA hurdle, near $109.20, the previous day. That said, the receding bearish bias of the MACD and recently firmer RSI favor the upside momentum.