WTI drops back below $ 63.50, despite risk-on

• Recovery loses steam near 5-DMA of $ 63.72.
• Bullish EIA report, risk-on market profile cap ignored?

WTI (oil futures on NYMEX) consolidated the overnight recovery in the Asian trades and broke to the downside in the European session, now accelerating the declines towards the $ 63 mark.

The barrel of WTI staged a solid comeback in the US last session amid a turnaround in the US stocks on easing tensions over the US-China trade spat while an unexpected drawdown in the US crude stockpiles data, as reported by the Energy Information Administration (EIA), also added to the upswing in the commodity.

The EIA data showed that the US crude inventories fell by 4.6 million barrels last week, compared with the expectations for an increase of 246,000 barrels, Reuters reported.

However, in today’s trading so far, the bulls appear to have turned cautious, despite the risk-on rally seen in the European equities, as broad-based US dollar buying continue to dent the sentiment around the USD-sensitive oil. Looking ahead, the US rigs count and NFP data will be closely eyed for fresh trading impetus.

WTI Technicals

Joshua Gibson, Analyst at FXStreet noted: “The challenge for oil bulls will be to extend the bullish correction after rejecting the 34-day EMA at 63.00, and further support sits at the low just above 62.00, but immediate resistance sits at late March's swing low of 64.15 with further resistance at the level to beat for further gains this year, 66.25.”