WTI ignores upbeat API data amid fresh risk aversion wave

• WTI stays below 100-day SMA despite weaker than previous API stockpiles report.
• Markets turn risk-averse ahead of the key events.
• Doubts over US-China trade deal, Brexit and US-Turkey play weigh on sentiment.

With the doubts over energy demand and the market’s caution ahead of the key data/event challenging private inventory data, WTI declines to intra-day low of $55.35 during Wednesday’s Asian session.

Prices slipped beneath 100-day Simple Moving Average (SMA) on Tuesday after doubts over the US-China meeting in Chile were resurfaced by Reuters. The reasons spotted include geopolitical tension and fire. Though, the losses were limited by the weekly Crude Oil Stock report from the American Petroleum Institute (API) survey. The report said that the inventory figure for the week ended on October 25 dropped from 4.45 million barrels to 0.592 million barrels.

However, buyers fail to return as China’s objection to the United States’ (US) stand on Xinjiang adds uncertainty to the US-China trade deal. Further, the US House of Representatives recently backed legislation to levy harsh sanctions on Turkey over its offensive in Syria, which in turn added weigh to the market’s risk-tone.

Additionally, investors remain cautious to challenge the energy benchmark’s decline below key SMA as the market’s turn risk-averse before the key central bank meetings and the US Gross Domestic Product (GDP) data.

While macro headlines and the heavy economic/event rush will keep Oil traders entertained, official US inventory data for the week ended on October 25, the Energy Information Administration (EIA) Crude Oil Stocks Change, will also be crucial to watch. Forecasts suggest +0.729 million barrels of prints to follow -1.699 million barrels prior.

Technical Analysis

Not only a 100-day SMA level near $56.00 but the monthly top of $57.00 will also question the quote’s rise. On the downside, an upward sloping trend line since October 10 around $54.20 will be the key support to watch.