• WTI price is reversing the previous rebound, as it tested $101.50.
• Firmer US dollar, risk-off flows weigh on the higher-yielding US oil.
• WTI sellers remain hopeful following the dismal IEA monthly report.

WTI (NYMEX futures) is trading under heavy selling pressure so far this Thursday, reversing roughly a quarter of Wednesday’s sharp gains.

The renewed downside in the US oil intensified over the last hour, as risk-off intensified on the European open and engulfed higher-yielding assets such as oil.

The US dollar extended its upsurge, benefiting from the risk-off flows, as the dollar gauge trades at its highest level in two decades near 104.30.

Markets shun riskier assets amid heightened worries over surging inflation and global economic growth fears after hotter US CPI bolstered the Fed’s tightening bets. Further, the Chinese covid lockdowns-led supply chain crisis also keeps sapping investors’ confidence.

The International Energy Agency’s (IEA) downward revision to the global oil demand forecasts for 2022 by 70K barrels collaborated with the renewed selling pressure around the black gold. IEA said that Chinese lockdowns and high inflation are to be blamed for lower oil demand projections.

Attention now turns towards the US open, with the risk-off profile likely to extend, reflective of the 0.50% drop in the S&P 500 futures. Unabated US dollar demand is likely to keep the USD-priced WTI on the backfoot.

WTI: Technical levels to watch