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WTI falls below $89 on increased production and concerns about economic slowdown

  • WTI crude oil falls 2.37%, to $88.54 per barrel, due to profit taking and the strengthening of the Dollar, driven by the rise in US Treasury bond yields.
  • Concerns about an economic slowdown, accentuated by weak manufacturing data from China and Europe, pose potential risks to oil demand.
  • Rising oil production from OPEC countries and potential supply increases from Turkey and Saudi Arabia are adding to the downward pressure on oil prices.

He West Texas Intermediate (WTI), the US crude oil benchmark, sinks after reaching a daily high of $91.84 per barrel, although profit-taking and recent news of increased oil production weighed on crude oil prices. Thus, WTI is trading at $88.54 per barrel, losing 2.37% on the day.

West Texas Intermediate Crude Experiences Downturn Amid Strengthening Dollar, Rising Oil Production and Concerns About Impact of Global Economic Slowdown on Demand

The rise of the Dollar is considered the main driver, while operators made profits, as noted by Reuters. US Treasury bond yields, particularly the 10-year yield, which reached 4.70%, favored the Dollar, as shown by the Dollar Index (DXY). The DXY, which measures the performance of the Dollar against six currencies, is trading around 106.94, with gains of 0.72%, which is a headwind for dollar-denominated commodities.

Oil traders should be aware of the ongoing economic slowdown. China’s latest slowing Caixin Manufacturing PMI prompted a revision of the global economic outlook. Fitch Ratings noted that, despite the resilience of US consumer demand, it revised downwards its forecasts for 2024, due to the deepening decline in the real estate sector in China.

These data and those on factory activity in Europe, weaker than expected, weighed on WTI prices, since an economic slowdown could dent oil demand.

Recently, a survey revealed by Reuters showed that oil production rose for the second consecutive month in September, as revealed by the Organization of the Petroleum Exporting Countries (OPEC). The increases were led by Nigeria and Iran, as OPEC countries pumped 27.73 million barrels a day, up from 120,000 in August.

Oil supply grows

Meanwhile, Turkey announced that the country will resume operations on the Iraq pipeline this week, while Saudi Arabia could begin easing its additional supply cut of 1 million barrels a day.

WTI Price Analysis: Technical Outlook

Despite the decline, the US crude oil benchmark maintains its bullish bias, but if WTI falls below the last cycle low of $88.24 reached on September 26, it could open the door to further losses. A break of the latter would expose the 50-day moving average (DMA) at $84.66 as next support. On the contrary, to resume its bullish trend, WTI must surpass the year-to-date high of $94.99 for buyers to maintain hope of reaching $100 per barrel.


Latest price today 87.92
Daily change today -1.95
Today’s daily variation -2.17
Today’s daily opening 89.87
daily SMA20 88.94
daily SMA50 84.12
SMA100 daily 78
SMA200 daily 77.29
Previous daily high 92.11
Previous daily low 89.49
Previous weekly high 93.98
Previous weekly low 87.74
Previous Monthly High 93.98
Previous monthly low 83.09
Daily Fibonacci 38.2 90.49
Fibonacci 61.8% daily 91.11
Daily Pivot Point S1 88.87
Daily Pivot Point S2 87.88
Daily Pivot Point S3 86.26
Daily Pivot Point R1 91.49
Daily Pivot Point R2 93.1
Daily Pivot Point R3 94.1

Source: Fx Street

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