WTI grinds higher past $95.00 on EIA inventory draw, US-Iran chatters

• WTI seesaws around three-week high, picks up bids of late.
• EIA oil inventories dropped more than expected during the week ended on August 19.
• Concerns about US resistance to additional concessions to Iran also favor oil buyers.
• Mixed sentiment surrounding China and global growth tests the oil buyers.

WTI crude oil prices defend the 200-DMA breakout around $95.10 during Thursday’s initial Asian session. In doing so, the black gold justifies downbeat inventory numbers and expectations of no sooner arrival of Iranian oil to the markets.

The weekly stockpile data from the US Energy Information Administration (EIA) mentioned that the inventories dropped by 3.282M during the week ended on August 19, versus -0.933M expected and -7.056M prior.

On the other hand, the concerns that the US will not consider additional concessions to Iran in its response to a draft agreement that would restore Tehran's nuclear deal - and potentially the OPEC member's crude exports, per Reuters, also favor the black gold prices. The news also adds, “Oil was also supported after Saudi Arabia suggested this week that the Organization of the Petroleum Exporting Countries (OPEC) could consider cutting output, though bearish economic signals from central bankers and falling equities weighed.”

Furthermore, the US dollar’s resistance to refresh the multi-year high, mixed US data and hopes that China may overcome the economic woes add strength to the energy benchmark’s upside momentum.

US Dollar Index (DXY) began Wednesday on a firmer footing before retreating towards 108.50 as equities pared recent losses amid a lack of too-strong US data. Talking about the US data, Durable Goods Order for July dropped to 0.0% versus 0.6% expected and an upwardly revised 2.2% previous reading. However, Nondefense Capital Goods Orders ex Aircraft rose past 0.3% market consensus to 0.4%, versus 0.9% prior. Further, Pending Home Sales improved to -1.0% MoM in July versus -4.0% expected and -8.9% prior (revised down from -8.6%). On a yearly basis, the Pending Home Sales decreased by 19.9%, versus the previous contraction of 20.0%.

“Various Chinese state media agencies are coming to the rescue of the local currency, the yuan, after the recent depreciation, justifying that the country’s strong exports should offset a stronger dollar and hawkish Fed rate hikes,” mentioned Reuters on Wednesday.

Amid these plays, Wall Street printed mild gains and helps the S&P 500 Futures to remain mildly bid at around 4,150. That said, the US Treasury yields remain sidelined after refreshing the two-month peak near 3.10%.

Moving on, risk catalysts are the key while the second version of the US Q2 GDP will join the US Personal Consumption Expenditure (PCE) for the said period to decorate the calendar.

Technical analysis

A daily closing beyond the 200-DMA level surrounding $94.90, as well as crossing the $95.00 hurdle, keeps WTI buyers hopeful.