WTI pares intraday losses above $71.00 amid economic jitters, EIA Crude Oil Stocks Change eyed

• WTI remains depressed around intraday low, down for the second consecutive day.
• Sluggish markets, fears of banking crisis underpin US Dollar rebound even as Fed bets weigh on greenback.
• China trade numbers flash mixed signals for May, risk appetite
• API Crude Oil inventories marked surprise draw, EIA stockpiles eyed for clear directions.

WTI crude oil rebounds from the intraday low of $71.25 heading into Wednesday’s European session. In doing so, the black gold remains bearish for the second consecutive day amid economic fears, as well as the recent recovery in the US Dollar.

Softer statistics from the US, China and Eurozone recently renewed fears of economic slowdown. Additionally, fears of higher rates from the Bank of Japan (BoJ) and hawkish performances of the Reserve Bank of Australia (RBA) and Reserve Bank of New Zealand (RBNZ) also prod the previous economic optimism.

Previously, Saudi Arabia and OPEC+ pledge to deepen oil production cuts joined a surprise draw in the weekly inventories to allow the black gold in grinding higher. That said, the American Petroleum Institute (API) Weekly Crude Oil Stock dropped by 1.71 million barrels in the week ended on June 02 versus the previous addition of 5.20 million barrels.

Furthermore, comments from the US Energy Information Administration (EIA), suggesting that the US crude oil production this year would rise faster and demand increases would cool compared to prior expectations, per Reuters, also weigh on Oil price.

Elsewhere, an absence of the Federal Reserve (Fed) talks and a lack of major data on the calendar joined a recent pick-up in the odds favoring the Fed’s July rate hike to underpin the US Dollar Index (DXY) rebound.

Looking ahead, weekly Oil inventory data from the US Energy Information Administration (EIA) is likely to entertain energy traders. That said, the US Crude Oil Stocks Change is expected to mark a reduction in the inventory build with a 1.5M figure for the week ended on June 02, versus 4.488M previous readings.

Apart from the stockpile data, risk catalysts and economic growth signals will be closely observed for clear directions of the WTI crude oil.

Technical analysis

WTI crude oil’s failure to cross the 50-day Exponential Moving Average (EMA), around $73.40, directs the energy bears toward the one-month-old ascending support line, close to $67.85 at the latest.