Oil rebounds on bullish API report, EIA data next in focus

Oil benchmarks on both sides of Atlantic resumed its uptrend this Wednesday, reversing a temporary decline seen yesterday as bullish API inventory report lifted investors’ sentiment.

Oil eyes EIA stockpiles report

Currently, both crude benchmarks rallied in Asia, with Brent up +1.28% at $ 49.23, while WTI oil jumps +1.32% to $ 49.26. Oil prices snapped previous losses and swung back into the positive territory this session as the oil traders were impressed by a bigger-than expected drop in the US crude reserves, as reflected by the API report released lae-Tuesday.

The API report showed that the US crude stocks shrank by 5.1 million barrels to 536.8 million barrels over the week to May 20, more than a fall of about 2.5 million barrels expected.

Moreover, the US dollar paused its recent upbeat momentum and now consolidates heavy gains booked yesterday against its major peers, also adding to the bullish run seen nin the black gold. A stronger greenback makes dollar-denominated commodities more expensive in other currencies.

Looking ahead, the immediate focus now remains on the official Energy Information Administration (EIA) inventory report due later in the day, with markets forecasting a 1.66 million barrels drawdown for last week. While June 2 OPEC meeting in Vienna remains the main highlight for the oil markets.