WTI refreshes three-week high to cross $53.75 following API data

• WTI remains positive at the monthly top.
• A weaker than prior build in API data, the US sanctions and broad risk-on seem to please energy traders.
• All eyes on China headlines, for now, EIA data will be important as well.

WTI oil stays upbeat, following the run-up to the monthly high before a few minutes, as taking rounds to $53.70 amid the initial Asian session on Thursday. The black gold recently benefited from the weekly inventory data from the private provider, namely the American Petroleum Institute (API).

The private oil stockpiles for the week ended on February 14 suggested a build of 4.2 million barrels versus the previous increase of 6 million barrels. The lower than earlier data suggested the inventories are depleting and played their part in the current risk-on times.

Earlier during the day, the US announced fresh sanctions on Venezuela by way of blacklisting the arm of Russian oil company Rosneft. This suggests an increase in geopolitical tension and a price-positive catalyst for the energy benchmark.

Also supporting the oil prices is the current risk-on sentiment where Wall Street benchmark surged to record highs by Wednesday’s US session close.

Traders will now pay close attention to developments surrounding China as a likely further liquidity infusion from the dragon nation and efforts to placate traders can continue helping the oil benchmark.

Additionally, the weekly official stockpile data from the Energy Information Administration (EIA), up for publishing at 15:30 GMT, will also be the key. Forecasts suggest an increase of 3.767 million barrels in the inventories versus the previous rise of 7.459 million barrels of addition to the stockpile.

Technical Analysis

With sustained trading beyond a 21-day SMA level of $52.15, the bulls will target January 29 top close to $54.40. However, a confluence of 100 and 200-day SMAs near $56.40/50 will be a tough nut to crack for the buyers afterward.