- Crude oil finds a bottom around $68, but fails to rebound significantly from there.
- OPEC’s fourth downward revision to global crude oil demand is just a drop on a hot plate.
- The US Dollar Index recovers further, although it faces some profit taking.
Crude oil is trading broadly flat on Wednesday after an attempt on Tuesday to bounce from a support level near $68.00. Support came in the form of OPEC’s monthly report, in which the oil-exporting conglomerate noted a fourth downward revision to its global oil demand outlook for 2025. Markets took it as a no-brainer, and crude oil faces selling pressure again this Wednesday.
The US Dollar Index (DXY), which tracks the performance of the dollar against six other currencies, is stable after rising earlier on Wednesday. The main focus is on the publication of the Consumer Price Index (CPI) for October. A rise in inflation would diminish the possibility of an interest rate cut in December, just a day after Minneapolis Fed President Neel Kashakari warned markets that a December rate cut is not guaranteed in absolute.
At the time of writing, Crude Oil (WTI) is trading at $68.50 and Brent Crude at $72.25.
Oil News and Market Moves: Waiting for API Data
- Crude oil inventories in the Amsterdam – Rotterdam – Antwerp region rose by 1.1 million barrels in the week ending November 8 to 51.7 million barrels, according to Genscape data.
- China’s Cnooc’s Huizhou Phase II refinery halted units on Tuesday due to fluctuating production processes, according to the city’s fire department, Bloomberg reports.
- Iran’s Abadan oil refinery has said it has taken steps to keep oil exports stable under President Donald Trump, Reuters reports.
- The American Petroleum Institute will release its weekly figures for the change in US crude stockpiles. Last week, there was a surprise build of 3.132 million barrels. The numbers are expected at 21:30 GMT.
Oil Price Technical Analysis: Outlook unchanged
Crude oil prices are failing to catch a break and continue to face substantial selling pressure. The fact that OPEC has revised its demand outlook for the fourth time is not really moving the needle at all for oil prices as long as nothing fundamentally changes in terms of supply and demand. Treat brief geopolitical items as blips on the radar, as the overall trend sees crude oil prices sliding lower in the long term.
To the upside, the 55-day SMA at $70.40 is the first to consider ahead of the significant technical level at $73.72, with the 100-day SMA and some crucial lines. The 200-day SMA at $76.71 is still quite far away, although it could be tested should tensions arise in the Middle East.
Traders need to look much lower, towards $67.12 – a level the price held in May and June 2023 – to find first support. Should that level be broken, the 2024 year-to-date low emerges at $64.75, followed by $64.38, the 2023 low.
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 hub, 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
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
