WTI consolidates the recovery below $ 56.50 ahead of US data

• Oil cheers Middle East tensions, US crude stocks draw.
• Broad USD strength, bleak macro-economic outlook limits oil’s upside.
• Oil to take cues from US Q2 GDP and Rigs Count data later today.

WTI (futures on Nymex) looks to replicate the moves seen in Europe on Thursday, extending its gradual rise from the overnight lows of 55.80. The bulls continue to draw support from Gulf tensions while oil demand growth concerns and a broadly stronger US dollar keep the recovery in check.

Looming supply disruption concerns amid ongoing Middle East tensions continue to keep the sentiment buoyed around the black gold. “A week after Iran seized a British-flagged tanker in the Gulf, Britain has sent a warship to accompany all British-flagged vessels through the Strait of Hormuz, a change in policy announced on Thursday,” Reuters reports.

Further, the prices remain supported by a bigger-than-expected drop in the US crude inventories, as reported by both the Energy Information Administration (EIA) and American Petroleum Institute (API) earlier this week.  

Soggy global growth outlook weighs

The latest weak manufacturing sector activity reports from both EU and the US re-ignited global economic slowdown fears and weighed on the oil market sentiment, raising worries over the global fuel demand outlook. This could very well restrict the further upside in the barrel of WTI.

Looking ahead, the US Q2 Advance GDP and Oil Rigs Count data are likely to have a major influence on the oil price action.

WTI Levels to watch