- WTI crude oil plummets to $72.55 per barrel as US crude inventories build up more than expected.
- Weak U.S. economic indicators, such as rising jobless claims and falling industrial production, are fueling concerns about weakening oil demand.
- Despite the downward trend, possible production cuts from Saudi Arabia and Russia and optimistic forecasts from Commerzbank offer some support to oil prices.
He West Texas Intermediate (WTI), the US crude oil benchmark, plummets to a four-month low of $72.22 in late trading in the New York session. Investor concerns and the buildup of US oil inventories dragged WTI prices down more than 5%, trading at $72.55 after reaching a high of $76.58.
WTI prices pressured by poor US economic data and concerns about global demand.
Data on Wednesday from the US Energy Information Administration (EIA) revealed a huge crude oil buildup of more than 3.6 million barrels in the United States last week, sending black gold tumbling. This, together with the uninspiring data from the US, which points to a faster economic slowdown, caused a drop in WTI due to fears that demand would decrease.
US industrial production plummeted on Thursday due to the United Auto Workers (UAW) strike. At the same time, jobless claims last week saw the biggest increase in three months and hit a high of 230,000, exceeding forecasts of 220,000, suggesting the labor market is easing. Wednesday’s US retail sales report was subdued, suggesting American households are starting to spend less heading into the holiday season.
OPEC and the International Energy Agency (IEA) predicted that supply would decline in the fourth quarter, although US data shows the opposite.
Meanwhile, the expected slowdown of oil refineries in China added to the list of headwinds dragging down WTI prices. However, Industrial Production in China advanced, as did retail sales. However, weak growth in the Japanese economy during the third quarter hurts the prospects for higher oil prices, as Japan is one of the world’s largest energy importers.
Therefore, WTI prices would be under pressure. Still, a commitment by Saudi Arabia and Russia to cut production by 1.3 million barrels by the end of the year would dampen oil prices.
Commerzbank analysts expect oil prices to exceed $80 in the first quarter of 2024. They write that “if Saudi Arabia were to maintain its current level of production, the risk of oversupply would be substantially reduced and would therefore allow “We expect the price to recover slightly to $85 per barrel (from its current level; the previous forecast assumed a drop to $85).”
WTI Price Analysis: Technical Perspective
On a daily basis, WTI has turned lower after falling below the last cycle low recorded on August 24, at $77.64, opening the door to further losses. Recovery prices could be seen as better entry prices for shorts, who could be looking to push prices towards the June 28 cycle low at $67.10, well below $70.00. On the other hand, if buyers push prices above the November 8 daily low of $74.96, this could pave the way for a rally towards $80.00.
WTI US OIL
|Latest price today
|Today’s daily change
|Today’s daily variation
|Today’s daily opening
|Previous daily high
|Previous daily low
|Previous weekly high
|Previous weekly low
|Previous Monthly High
|Previous monthly low
|Daily Fibonacci 38.2
|Fibonacci 61.8% daily
|Daily Pivot Point S1
|Daily Pivot Point S2
|Daily Pivot Point S3
|Daily Pivot Point R1
|Daily Pivot Point R2
|Daily Pivot Point R3
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.