WTI climbs to two-month highs at $ 82.50

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  • WTI has risen to $ 82.50 and is trading at two-month highs as the dollar falls after the CPI.
  • Oil prices experienced a positive reaction to the latest weekly US EIA inventory report, which showed an eighth consecutive decline.

Oil prices They hit two-month highs on Wednesday, fueled by the weakening US dollar following a US inflation report broadly in line with expectations. The prior month’s WTI futures recently reached $ 82.50, the highest since November 10 and well above their levels prior to the initial news of the Omicron Covid-19 variant (in the $ 78.00 zone). WTI is up more than $ 4.50 from its previous weekly lows below $ 78.00, a rally of approximately 6.0%. Oil bulls are now likely to be on the lookout for a test of 2021 highs in the $ 85.00 zone.

Market participants remain optimistic about the demand outlook for 2022 and the economic impact of Ómicron is seen as likely to be short-lived, prompting the US EIA to improve its oil demand outlook for year. The agency said Tuesday that it now forecasts a US demand increase of 840,000 barrels per day (BDP) in 2022 from its forecast last month of a 700,000 increase in demand.

Meanwhile, OPEC + production remains a prominent issue, with smaller producers (Libya and Nigeria) still struggling to keep up with recent increases in production quotas and talks between Western powers and Iran about a comeback. JCPOA makes no progress. That suggests that large amounts of Iranian crude oil exports will not return to global markets anytime soon. Some are concerned about the risks to demand in China / Asia, as China maintains its zero Covid-19 stance even in the face of the much more transmissible + omicron variant, but the lockdowns there, for now, remain localized.

Finally, the WTI saw a modest boost from the recently released US EIA weekly crude oil inventory report. The report showed a drop in crude oil stocks of about 4.5 million barrels, much larger than the 1.9 million barrels expected, despite Tuesday’s private inventory report pointing to a lesser-than-expected drop of about 1 million barrels. However, distillate stocks increased by approximately 2.5 million barrels, more than the expected 1.75 million barrels, and gasoline stocks saw a massive increase of almost 8 million barrels, well above expectations of a 2.4 accumulation. millions. Nonetheless, the bullish number in the headline stole attention as major crude oil stocks have been down for eight straight weeks.

Technical levels

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