The black gold attempted a comeback on Tuesday, as markets resorted to profit-taking on their short positions after three back-to-back days of losses. Further, a dramatic turnaround in the risk sentiment, induced by the Yuan recovery, also helped the higher-yielding oil to recover losses.
However, the bounce was short-lived, as the sellers returned amid escalating US-China trade tensions, especially after the US Treasury labeled China as a currency manipulator. Mounting US-Sino trade risks weigh negatively on the global growth outlook, eventually clouding the crude demand outlook and rendering oil-negative.
Additionally, a bounce in the US dollar across the board combined with uncertainty over US-Iran spat continues to lend support to the barrel of WTI. The USD index bounced-off lows near 97.20 region and now consolidates around 97.50 ahead of Fedspeak.
Focus now shifts towards the US American Petroleum Institute (API) weekly Crude Stockpiles data due later today at 2030 GMT for the next direction on the prices.
