WTI drops nearly 1% ahead of EIA report

WTI crude oil lost some ground on Wednesday and reversed nearly $1 from previous session's swing high level beyond mid-$53.00s.

The commodity, however, has managed to bounce off lows and is currently trading around $52.70 region, down nearly 1.0% for the day. Investors on Wednesday brace for the official US inventories data from EIA, due later during NY session. 

Following Tuesday's bearish API report, which showed an increase of 2.9 million barrels in the US crude supplies, market participants are anticipating a larger than expected rise in the US crude inventories for the third consecutive week.

Continuous rise in inventories would reinforce speculations that US shale output is rising, which could negate the optimism led by oil output production cut agreement between OPEC, and other major non-OPEC producers, and derail their efforts to rebalance global oil supply and demand.

Also supporting the commodity's bearish bias on Wednesday is the US President Donald Trump's order on Tuesday to revive Keystone XL and Dakota Access oil pipelines. The order was in line with his promise to support the US oil industry and encouraged market participants to revise forecasts of growth in US oil production.

Should the official figures confirm API numbers, we could see the commodity coming under some renewed selling pressure and extend retracement move from level beyond $55.00 mark touched at the beginning of this year.