WTI Crude oil prices were trading near $60.70 per barrel, sharply lower from the recent high of $64.25 per barrel registered on Apr. 20.
A surprise build in crude oil inventory and surging COVID-19 cases globally are keeping oil prices under pressure.
Weak fuel demand due to trade restrictions set in different states to prevent the spread of deadly COVID-19 cases in India is a bearish factor for crude prices. India's oil ministry reported on Tuesday that Indian refiners imported 198.2 MMT of crude for the year ended Mar. 31, down -13% y/y and the lowest level in 6 years.
US and Iran negotiations are likely to keep oil prices under pressure. The US and Iran may be edging closer to starting negotiations on a nuclear deal, which could eventually allow the US to ease sanctions against Iran and allow it to export more crude oil. Iran on Tuesday said that "we think the climate of talks in Vienna is positive, and we're cautiously hopeful about the revival of the nuclear deal."
Rapidly expanding global COVID-19 cases are negative for energy demand. The overall global COVID-19 caseload has topped 143.5 million, while deaths have surged to more than 3.05 million, according to Johns Hopkins University. India is leading the tally among other nation.
However, crude oil prices were receiving support from Chinese crude demand. China Mar crude processing rose +20% y/y to 14.14 million BPD. EIA crude inventories unexpectedly rose +594,000 bbl versus expectations for a -3.5 million bbl draw.
EIA gasoline stockpiles rose +85,000 bbl, below expectations of +1.0 million bbl on signs of stronger demand after U.S. gasoline demand the week of Apr. 16 rose +1.8% w/w to a 7-3/4 month high of 9.104 million BPD.
Also, crude supplies at Cushing, delivery point of WTI futures, fell -1.32 million bbl to a 2-month low of 45.35 million bbl.
As of the latest EIA report, US crude oil inventories were +0.8% above the seasonal 5-year average, gasoline inventories were -2.6% below the 5-year average, and distillate inventories were +2.1% above the 5-year average.
Meanwhile, US crude oil production in the week ended Apr. 16 was unchanged w/w at 11.0 million BPD and was down by -2.2 million BPD (-16.0%) from the Feb-2020 record-high of 13.1 million BPD.
Crude oil prices are likely to face stiff resistance near $64.10 per barrel while key support level could be seen around $59.90 and $58.90 per barrel.