WTI eases from eight-year high above $100 despite upbeat API, Ukraine fears ahead of OPEC+ verdict

• WTI consolidates the biggest daily jump since May 2020.
• API stockpiles marked surprise draw of 6.5 million barrels for the week ended on February 25.
• Russia-Ukraine jitters intensify despite global pressure on Moscow, OPEC+ is likely to respect current plans, may ignore geopolitical challenges.
• EIA data, Fed Chair Powell’s Testimony will also keep oil traders busy.

WTI crude oil buyers take a breather around $104.00 during Wednesday’s initial Asian session, following a whopping rally of more than 10% the previous day.

The black gold earlier cheered hopes of no major relief to WTI traders from global producers despite the ongoing Russia-Ukraine crisis.  On the same line were private inventory numbers and macros suggesting further tensions emanating from Moscow.

As per the latest weekly industry stockpile data from the American Petroleum Institute (API), US crude stocks fell by 6.1 million barrels, versus the previous addition of 5.983 million barrels.

Elsewhere, the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, a grouping known as OPEC+, is likely to stick to its existing policy of increasing output by 400K barrels per day (BPD) each month in April, per Reuters. The news quotes the reason as, “Russia's invasion of Ukraine having not affected OPEC+ deal functioning so far.”

Talking about geopolitics, Russian President Vladimir Putin has already conveyed his wish to continue with the military march in Kyiv until his goal is met. At the latest, the International Monetary Fund (IMF) and World Bank (WB) mentioned, “War in Ukraine creating significant spillover effects in other countries, commodity prices rising, risk driving further fueling inflation.” On the same line, US Treasury Secretary Janet Yellen also said, “The G7 continues to support the removal of key Russian financial companies from SWIFT. Additionally, prepared remarks for US President Joe Biden’s State of the Union (SOTU) speech also signaled that Biden emphasized self-reliance to tame inflation while also criticizing the Russian invasion of Ukraine.

Moving on, the OPEC+ verdict and Ukraine-Russia headlines are the main catalysts for the WTI crude oil prices moving on. Additionally, Fed Chair Jerome Powell’s bi-annual testimony and weekly official oil inventory data from the US Energy Information Administration (EIA), 2.796M expected and 4.515M prior, will be important as well.

Technical analysis

Although overbought RSI hints at a pullback towards the $100.00 threshold, WTI crude oil bulls can keep the June 2014 peak of $107.45 on the radar.