- The decline in oil prices continues due to risk aversion and the dollar rises.
- WTI tests levels below $ 80.00 and threatens further declines.
- Today data from Baker Hughes and consumer confidence in the US.
The WTI’s barrel price is losing 1.61% on Friday, losing ground for the third day in a row. It is piercing the $ 80.00 level, and is at a one-week low, showing a nearly $ 5 drop from its three-day peak.
The price of crude oil is still close to the highs in years that it reached this month, but the short-term tone has changed significantly and is now in correction mode. The next support is at $ 79.20 and below $ 78.40 and not much further to the 76.50 zone. A return above $ 82.00 would cast doubt on the downward correction.
The Negative tone intensified after US inflation data on Wednesday. These generated expectations of an adjustment in the Federal Reserve’s policy and also increased the possibilities that the US will make use of its strategic oil reserves to limit increases in energy prices. This week’s inventory data didn’t help oil either.
Another factor that is playing against oil prices is the rise of the dollar, which, measured by the dollar index (DXY), is at its highest since July of last year. The DXY rises for the third day in a row on Friday and is above 95.20. The expectation of a possible stronger and sooner monetary tightening by the Federal Reserve, after the inflation data released on Wednesday, continues to be a push factor for the dollar.
November preliminary consumer confidence data from the University of Michigan will be released on Friday. Also the Baker Hughes oil rig counter.
Technical levels
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