WTI slips beneath $53.00 as API inventories jump

• WTI extends the consolidation of recent gains on API stockpiles.
• API Weekly Crude Oil Stock grew 2.562M for the week ended on January 15.
• Risk-on takes clues from Biden Presidency, virus/vaccine news.
• US dollar’s corrective pullback, China’s sanctions on 28 Americans add to the negatives.

WTI stands on a slippery ground near $52.80 following the release of a private oil inventory report during Thursday’s Asian session. Before reacting to the inventory data, the black gold started trimming the latest gains as the US dollar bounced off weekly lows amid the mixed headlines concerning the coronavirus (COVID-19) and its vaccines.

As per the latest Crude Oil Stock report from the American Petroleum Institute (API), 2.562 million barrels of oil were added to the inventories versus the previous depletion of 5.821 million. Market consensus favored another draw in the stock and hence the data has been impactful on WTI.

Also weighing on the oil prices could be the chatters signaling the fears of a jump in the virus-led death and infections as well as China’s recent sanctions on 28 US persons, most of them were in the Trump administration. Furthermore, activity restrictions in China, Europe, the UK and some part of Pacific nations join the International Energy Agency’s grim outlook of oil demand in 2021 to weigh on the quote. The IEA recently said, in its Oil Market Report, “ demand to average 96.6 million barrels per day (bpd) in 2021, after crashing by an all-time high of 8.8 million bpd in 2020 under the weight of the Covid-19 pandemic.”

It’s worth mentioning that the US dollar’s corrective pullback from the weekly low also heavy the commodity prices. The US dollar index (DXY) recently bounced off weekly bottom surrounding 90.27 to 90.47.

Looking forward, global oil traders will keep their eyes on the market sentiment while closely observing how Joe Biden acts during his first full day in the Oval Office. On the data front, the official inventory release from the Energy Information Administration (EIA), expected -0.28M versus -3.247M, out for publishing on Friday, will be the key.

Technical analysis

Unless breaking the latest low near $51.80, WTI buyers are less likely to drop their idea of attacking the multi-month peak, marked earlier in the month, near $54.00.