untitled design

WTI exceeds $90 per barrel as US oil inventories fall

  • WTI is trading above $90 and has gained more than 2% weekly.
  • The US government reported a contraction in oil-related products, which is a tailwind for crude prices.
  • WTI remains neutral but if it breaks above $93.62, oil could rally to the 200 day EMA.

The Western Texas Intermediate (WTI), Benchmark US crude rises nearly 2% as dollar weakens ahead of Fed decision, while US stocks decline as refiners increase output activity before the arrival of the winter season. At the time of writing, WTI is trading at $90.13 per barrel, having hit a daily low of $87.76.

According to the US Energy Information Administration (EIA), most petroleum-related products, such as gasoline and distillates, were reduced, raising analysts’ concern that the end of US stock releases will strain markets.

Sources quoted by Reuters stated that “with every passing week, the US is drawing down hydrocarbon inventories, and that begs the question of where the industry goes when there are no more supplies coming from releases from strategic oil reserves.” “.

Meanwhile, output from the Organization of the Petroleum Exporting Countries (OPEC) fell in October, while European countries’ oil embargo on Russia, set to take effect on December 5, is likely to keep oil prices rising.

However, China’s zero tolerance (Covid-19) restrictions and broad US dollar strength are keeping oil prices somewhat in check, though once the Fed pauses, if at all, the uptrend of WTI could resume.

WTI Price Analysis: Technical Outlook

WTI has a neutral-upward bias, although the 100 and 200 day EMAs would be difficult resistance levels to break, each around $92.50 and $98.37. The Relative Strength Index (RSI), in upsloping bullish territory, would open the door to a test of the October high at $93.62, which, if broken, could open the door to a test of the 200 day EMA. On the other hand, if WTI breaks below $87.42, a drop towards the 50-day EMA at $86.36 is expected.

Source: Fx Street

You may also like

Get the latest

Stay Informed: Get the Latest Updates and Insights


Most popular