WTI continues to edge higher toward $43 ahead of API data
- WTI is rising on Tuesday boosted by US production cuts.
- Easing US-China tensions revive hopes for a steady recovery in energy demand.
- Focus shifts to API's Weekly Crude Oil Stock data.
Crude oil prices posted small gains on Monday and continued to climb higher on Tuesday. As of writing, the barrel of West Texas Intermediate (WTI) was up 1.2% on a daily basis at $42.88.
US supply declines on hurricane fears
Energy companies in the US cut oil production at the US Gulf Coast due to the possibility of a rare double storm in the region. According to Reuters, producers reduced the output by 1.5 million barrels per day, nearly 14% of the total US output. Tropical Storm Laura is currently moving toward the Gulf of Mexico and is expected to turn into a major hurricane. On the other hand, Marco seems to have weakened and could dissipate on Wednesday before gathering further strength.
Meanwhile, easing US-China tensions revived hopes for a steady recovery in global crude oil demand and helped the WTI gather bullish momentum.
On Monday, US Trade Representative Robert Lighthizer, US Treasury Secretary Steven Mnuchin and Chinese Vice Premier held a phone call. In a statement summarizing the conversation, White House said that both sides agreed to continue pushing forward the implementation of the phase-one trade deal and remain committed to taking necessary steps to ensure the success of the agreement.
Later in the day, the American Petroleum Institue (API) will release the Weekly Crude Oil Stock data.
Technical levels to watch for