WTI: Mild bid around $63.70 ahead of China trade and Baker Hughes data

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  • The doubts over future energy demand at the time of increasing inventories challenge previous rally.
  • $61.80 can become important support with recent highs near $64.80 likely being tough upside resistance.

WTI is taking the rounds near $63.70 during early Asian sessions on Friday. The energy benchmark has been on a back-foot off-late as pessimistic economic views from the IMF and IEA join disappointing stocks report and data. China’s trade numbers and weekly release of the Baker Hughes US rig counts will be next on the traders’ radar.

The International Monetary Fund (IMF) and the International Energy Agency (IEA) both were of the view that the global economy is not in its best shape and might witness soft growth figures.

The US crude oil stock figures from the American Petroleum Institute (API) and Energy Information Administration (EIA) were both became seller-friendly as the API numbers rose from 2.963 million to 4.091 million whereas the EIA stat beat 2.294 million forecast with 7.029 million.

Additionally, China’s headline inflation numbers also couldn’t be in the favor of the black gold whereas speculations of the US-EU trade spat added further pressure on the WTI.

While March month trade numbers from China are expected to signal higher export growth of +7.3% versus -20.8% prior, likely dip in import to -9.6% from -0.3% earlier could weigh on sentiment.

The trade balance figure could rise to $7.05 billion against $4.08 billion prior. The Baker Hughes US oil rig counts have been on the rise since the last six-weeks and flashed 831 count for the week ended on 05 April.

WTI Technical Analysis

FXStreet analysis Ross J Burland expects further declines of WTI benchmark citing its failure to cross the rising resistance-line. However, not much south-run can be expected considering stochastic heading into oversold territory:

WTI has pierced the 61.8% Fibo in the 63.70s with 4HR stochastics heading towards oversold territory, albeit still with room to go.  A daily close below the 61.8% Fibo and the bears will have successfully overtaken bulls for the day and possibly for the next few periods; (Ideally, a close below the 8th April’s low would seal the deal and open the case for 61.80).