- WTI has moved towards key resistance as trend followers remain bid.
- Supply-side concerns have dominated the energy complex.
At the time of writing this report, West Texas Intermediate (WTI) crude oil is up more than 0.9% to $89.10, having claimed a low of $87.35 and a high of $89.78 so far. Supply concerns have dominated the market after the US reported better-than-expected economic growth data for the third quarter. At the same time, tight supplies of diesel and other distillates are fueling supplies.
The United States reported that its gross domestic product rose 2.6% annualized in the third quarter, beating the consensus forecast of 2.3%, but above the 0.6% drop in the second quarter. The data comes ahead of Friday’s PCE and next week’s Federal Reserve meeting. In any case, today’s data is expected to keep the Fed in its bid to curb inflation by raising rates sharply.
Meanwhile, weak distillate supplies are offering price support. The Energy Information Administration reported midweek that distillate stockpiles rose by 0.2 million barrels last week, coming off a 17-year low and offering support to oil. The EIA also noted that US oil exports hit a record last week. The agency reported that US gasoline inventories fell by about 1.5 million barrels last week and distillate values remained at record lows, while US crude oil exports were strong. said the bank. This offset a 2.6 million barrel increase in crude oil inventories, which was lower than expected.
Analysts at TD Stock Markets say energy prices are supported by algorithmic buying by trend followers. “CTAs are building a net long position in Brent crude as uptrend signals strengthen, but extreme volatility is likely to limit participation from this cohort amid weak trend signals and deleveraging.” of the risk parity portfolio.
Diesel prices are also being supported by trend-following CTAs, but as in other energy markets, something’s firepower remains limited by extreme complex volatility, arguing for little monitoring by of the CTAs”.
WTI Technical Analysis
In a previous analysis, it was stated that “price could be about to experience a bullish rally after a breakout of the structure, with bulls accumulating the recent price decline” with price on the backside of the channel:
As will be seen below, the price has moved towards the projected resistance as follows:
At this juncture, the bulls will need to break above $90.00 to have any prospect of breaking the $93.60 mid-October highs.
$88.50 is the first key support ahead of $87.00.
Source: Fx Street
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