WTI remains depressed around weekly low below $82.00, US GDP eyed

• WTI stays pressured after posting the heaviest daily fall in three weeks.
• Fears of tighter monetary policies joined dovish EIA stockpiles to please bears.
• Risk catalysts may entertain traders ahead of preliminary US Q3 GDP.

WTI holds lower ground near $81.60 after printing the heaviest downside play since early October.

The oil benchmark dropped the most in three weeks the previous day as market players feared the end of easy money from the key global central banks. The bearish impulse gained extra strength from the weekly official inventory data from the Energy Information Administration (EIA).

As per the latest release, the commercial crude oil inventories in the US increased by 4.3 million barrels in the week ending October 22, versus the expectation for an inventory build of 1.9 million barrels. On Tuesday, the Weekly Crude Oil Stock data from the American Petroleum Institute (API) also rose past 1.65M expected build to 2.318M previous readouts for the period ended on October 22.

Market sentiment dwindled on Wednesday after the UK announced bond tapering and the Bank of Canada (BOC) end the asset purchases. The news also joins multi-year high inflation expectations concerning the Eurozone and the US, as well as a jump in Aussie inflation data, to hint at further monetary policy tightening going forward.

It’s worth noting that the fresh US-China tussles, recently over telecom and Taiwan issues, add to the catalysts challenging the commodity prices.

To portray the mood, the US 10-year Treasury yields dropped the most since mid-August and weighed on the US Dollar Index (DXY). However, the equities were mixed and the futures are mildly bid by the press time.

Moving on, the market’s cautious mood ahead of the key US GDP and the European Central Bank (ECB) meeting may question the oil buyers.

Technical analysis

Despite the latest pullback, WTI remains above a two-month-old support line, around $80.70 by the press time, which in turn question the trend reversal expectations.