- WTI is under pressure, likely due to surprise US inventory buildup.
- A close below Tuesday's low would confirm a short-term bearish reversal.
WTI oil prices are flashing red in the Asian session with buyers sitting on the fence, possibly due to the surprise inventory buildup in the US.
At press time, a barrel of WTI is changing hands at $58.90, representing a 0.50% drop on the day.
The American Petroleum Institute (API) on Tuesday estimated an inventory build-up of 1.41 million barrels for the week ended Dec.4 compared to expectations of a 2.763-million-barrel drop in inventory.
The inventory report, which applied brakes to the oil rally near $59.50 in the overnight trade, is likely keeping the black gold on the defensive at press time.
While the benchmark is currently reporting losses on the day, it is still up more than 6.5% on a month-to-date basis.
Oil prices are expected to remain bid in 2020, courtesy of the recent decision by the OPEC and Russia to deepen production cuts. Goldman Sachs has increased the WTI spot price outlook to $58.5 per barrel for 2020 from $55.5. The bank has also revised its Brent spot price forecast to $63 per barrel for 2020, up from a previous estimate of $60.
The short-term trend would turn bearish if prices close below $58.54 on Wednesday, validating Tuesday's spinning top candle.