WTI down over 1%, breaches $ 56 ahead of EIA data

• A huge build in US crude inventories, bullish US oil output forecasts drag oil lower.
• Focus on EIA crude stockpiles data and risk trends, as a test of 55.50 looks inevitable.

WTI (oil futures on NYMEX) extends its decline in the European session, now looking to test the March lows at 55.57, as markets continue to weigh in a bigger-than-expected build in the US crude inventories, as reported by the American Petroleum Institute (API) a day before.

The API showed that the US crude stockpiles rose by 7.3 million barrels in the week ending March 1 to 451.5 million, compared with analysts’ expectations for an increase of 1.2 million barrels, Reuters reports.

Moreover, bullish supply-side forecasts by two big US shale oil producers, Chevron Corp and Exxon Mobil Corp, also collaborated to the downbeat tone around the black gold and undermined the efforts by the OPEC’s and its allies to cut the output levels.

Furthermore, the latest OECD global growth forecast, showing a downgrade in the 2019 global economic growth forecast to 3.3% from 3.5%, could also exacerbate the pain in the barrel of WTI, as attention now turns towards the official crude stocks data from the US Energy Information Administration (EIA) that will drop in at 1530 GMT.

WTI Technical Levels