Oil bounces in Asia, EIA inventory report eyed

Oil prices on both the sides of the Atlantic changed course and attempted a recovery in the Asian trades, after having slumped 3% on bearish monthly reports from both the IEA and OPEC.

Oil cheers upbeat API report

Currently, both crude benchmarks trade in the green, with Brent up 0.36% at $ 47.27, while WTI gains +0.50% to $ 45.31. Oil prices pared gains, although kept the recovery mode intact, largely on the back of bullish API report, which showed a 1.4-million-build in US crude oil inventory over last week, a much-lower build against expectations of a 4-million-barrel rise.

Moreover, subdued activity surrounding the greenback amid weaker treasury yields also back the upside in the black gold. A weaker greenback makes the dollar-denominated commodity cheaper for the foreign buyers.

On Tuesday, oil prices slumped 3% after both the EIA and OPEC made downgrade revisions to their global demand forecasts, while also pointed out that the global crude glut could persist for much longer than expected.

Later today, the official government crude inventory report published by the EIA will grab a lot of attention, as it will provide fresh hints on the supply-side scenario and hence, shape up the next direction in oil.