Crude oil eases further as Pemex fully resumes operations in the Gulf of Mexico

  • Oil prices are falling for the second day in a row ahead of the API release.
  • Pemex reports that all of its oil platforms and export terminals in the Gulf are operational again after closing due to bad weather.
  • The US Dollar Index is trading around 107.00, up against most major peers.

Crude oil falls further on Tuesday, sliding below $70.00, following news that Pemex, Mexico’s state oil producer, has fully resumed operations on all of its platforms in the Gulf region. The news comes with the end of the annual hurricane season and improving weather conditions, meaning more supply is expected to come online.

The US Dollar Index (DXY), which measures the performance of the US Dollar (USD) against a basket of currencies, is up against almost all major currencies this Tuesday. The move continues to be driven by the preliminary release of the US Purchasing Managers’ Index (PMI) for December, which showed the economy expanded at the fastest pace in 33 months driven by the services sector. Meanwhile, traders are preparing for the retail sales release on Tuesday and the Federal Reserve’s rate decision on Wednesday.

At the time of writing, crude oil (WTI) is trading at $69.65 and Brent crude at $73.05.

Oil News and Market Moves: More Supply Reported Online

  • Pemex’s oil platforms and all crude oil export terminals are operating normally after weather conditions improved in the Gulf of Mexico, according to a statement from the group, Bloomberg reports.
  • The EU has imposed sanctions on Dutch citizen Niels Troost. Troost was allegedly involved in trading Russian oil above the price limit set by Western countries in response to Moscow’s large-scale invasion of Ukraine, the FT reports.
  • At around 21:30 GMT, the American Petroleum Institute (API) will publish its weekly crude oil inventory figures for the week of December 13. Last week, there was an increase of 0.499 million barrels.

Oil technical analysis: Caught between two lines

Crude oil prices are softening on Tuesday, with last week’s peak at $70.96 possibly the top for now. There is a fairly stable bandwidth visible on the charts, with $67.00 as the lower band and $71.50 as the upper band, and this range looks like it will extend until January 2025.

Looking up, $71.46 and the 100-day SMA at $71.03 are acting as firm resistance levels. On Friday, some selling pressure already emerged ahead of that same 100-day SMA. In case oil traders can break through that level, $75.27 is the next crucial level, although beware of rapid profit taking with the end of the year fast approaching.

On the downside, it is too early to see if the 55-day SMA will recover back to $70.12. That means that $67.12 – a level the price held in May and June 2023 – remains the first solid support nearby. In case of a break, the 2024 year-to-date low emerges at $64.75 followed by $64.38, the 2023 low.

US WTI Crude Oil: Daily Chart

US WTI Crude Oil: Daily Chart

WTI Oil FAQs


WTI oil is a type of crude oil that is sold in international markets. WTI stands for West Texas Intermediate, one of the three main types that include Brent and Dubai crude. WTI is also known as “light” and “sweet” for its relatively low gravity and sulfur content, respectively. It is considered a high-quality oil that is easily refined. It is sourced in the United States and distributed through the Cushing facility, considered “the pipeline junction of the world.” It is a benchmark for the oil market and the price of WTI is frequently quoted in the media.


Like all assets, supply and demand are the main factors that determine the price of WTI oil. As such, global growth can be a driver of increased demand and vice versa in the case of weak global growth. Political instability, wars and sanctions can alter supply and impact prices. The decisions of OPEC, a group of large oil-producing countries, is another key price factor. The value of the US Dollar influences the price of WTI crude oil, as oil is primarily traded in US dollars, so a weaker Dollar can make oil more affordable and vice versa.


Weekly oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) influence the price of WTI oil. Changes in inventories reflect the fluctuation of supply and demand. If the data shows a decline in inventories, it may indicate an increase in demand, which would drive up the price of oil. An increase in inventories can reflect an increase in supply, which drives down prices. The API report is published every Tuesday and the EIA report the next day. Their results are usually similar, with a difference of 1% between them 75% of the time. EIA data is considered more reliable since it is a government agency.


OPEC (Organization of the Petroleum Exporting Countries) is a group of 13 oil-producing nations that collectively decide member countries’ production quotas at biannual meetings. Their decisions often influence WTI oil prices. When OPEC decides to reduce quotas, it can restrict supply and drive up oil prices. When OPEC increases production, the opposite effect occurs. OPEC+ is an expanded group that includes ten other non-OPEC member countries, including Russia.

Source: Fx Street

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