Although prices appear to be taking a break during Wednesday’s Asia Pacific trading sessions, last week’s losses have been nearly reversed. Analysts were disappointed by the American Petroleum Institute’s (API), which left prices vulnerable to wider risk trends.

The optimism that helped prices rebound last week is still susceptible to the same causes, Covid and resulting lockdowns. Along with bond and equity investors, energy traders will be keeping an eye on any deteriorating developments. These developments could lead to government policymakers increasing restrictions.

Nevertheless, Asia Pacific traders witnessed several shots this morning. The Australian state of New South Wales (NSW), reported today 919 new Covid cases locally sourced between 8 and 8 p.m. local time. This is an increase of 753 cases in the 24-hours preceding. Hospitalizations increased by 645 to 608 from 608. Up from 34, 40 are now on ventilators.

New Zealand also reported 62 cases of locally-sourced cases. These numbers are bad news for Trans-Tasman economies. These worrying trends could lead to more lockdown extensions if they continue. This could be a catalyst for another risky move that could increase oil prices.

Crude and Brent traders will be watching the oil stocks report tomorrow. The US Energy Information Administration will publish its weekly Petroleum Status Report. This report includes crude oil inventories and other fuel products. According to a Bloomberg survey, analysts expect that crude oil stocks will fall by 2.3 million barrels over the week ending August 20. Although a better figure than expected may allow oil to resume its upward trend, the API figures provide a bearish preface that you should consider up until then.

CRUDE OIL TECHNICAL FUTURE

Overnight, prices topped the 100-day Simple Moving Averages (SMA), which coincides with a trendline providing support up to last week. This area seems to be acting as confluent resistance. The MACD oscillator is close to a bullish signal. A crossover of the MACD line from the signal line will be necessary. If prices break through the upside obstacles, they may aim for the psychologically intimidating 70 level. A drop lower could see bears again take the wheel in the short-term.