Oil inter-market: faces double-whammy, EIA report in focus

The US oil snapped the recent bullish momentum and traded with size-able losses this Wednesday, mainly driven by a profit-taking slide as we head towards the much-awaited EIA Energy Information Administration (EIA) crude stockpiles report, which will be published later in the American morning.

Markets are expecting a rise of about 300,000 barrels in weekly US crude stockpiles. Gasoline stocks are expected to shrink by about 1.64 million barrels.

The renewed selling in the black gold was prompted by the weekly API inventory report released late-Tuesday, which showed a bigger-than expected fall in the crude supplies; however, markets reacted negatively on the back of an unexpected rise in gasoline stocks.

Adding to the negative fundamentals, the US dollar staged a solid bounce against its major peers after the recent slump, as the bulls cheer hawkish Fed talks delivered a day before.

Moreover, persisting risk-off trades amid negative global equities also dent the appetite for risky assets such as oil. The CBOE Volatility index (VIX), which gauges risk trends, is seen rising higher, indicating risk-off market profile.

Further, more or less stable 30-year treasury yields also suggest cautious tone prevalent in the markets and thus, keep the sentiment around the oil prices undermined.