WTI hovers around $72 mark, awaits fresh impetus

• WTI is posting small gains around $72 amid pre-Fed market caution.
• Renewed US dollar buying, covid fears cap the upside.  
• The US oil draws support from tighter supplies ahead of EIA data.  

WTI (futures on Nymex) is posting small gains while hovering around the $72 barrier, snapping two straight days of declines.

Despite the minor bids, the pre-Fed decision cautious trading and worries over surging covid cases globally continue to limit the upside attempts in the higher-yielding oil.

At the time of writing, the US oil rises 0.50% on the day to trade at $72.03, looking for fresh impetus in order to find acceptance above the latest. While holding at higher levels, the black gold consolidates its staggering recovery from two-month lows of $65.11 reached last week.

Expectations of tighter crude supplies continue to offer support to WTI bulls. This comes after the American Petroleum Institute (API) reported a bigger-then-expected draw in the US crude stockpiles. The API report showed that the US crude stocks fell by 4.7 million barrels for the week ended July 23 vs. expectations of a drop of 2.9 million barrels.

However, looming worries over the rapid spread of coronavirus and the International Monetary Fund’s (IMF) cutting its growth estimates for Emerging Asia raise concerns over the demand prospects for oil and its products, in turn, weighing on WTI prices.

Attention now turns towards the Energy Information Administration (EIA) weekly US crude supplies report and the FOMC decision for fresh trading opportunities in the commodity. The US dollar remains well-bid across its main rivals ahead of the Fed decision.

WTI technical levels to consider