WTI moving away from weekly lows and rising to $73.50 after an increase in inventories

• WTI pares part of the 9% losses recorded during the week and recovers the $73.00 level.
• Recessionary fears sparked by weak PMI readings in China and the US dampened investors’ appetite for oil.
• WTI Price Analysis: Bearish bias while held below $82.00.

The Western Texas Intermediate (WTI), Benchmark US crude oil bounces around one-month lows of $72.50 a barrel and breaks above $74.00 thanks to the sudden shutdown of a US pipeline. Furthermore, the reopening of China has been applauded by oil traders. As of this writing, WTI is trading at $73.65, up 0.61%.

The oil market began 2023 with significant losses close to 9% on Tuesday and Wednesday, weighed down by fears of recession, after the publication of the US and Chinese manufacturing activity reports, with both countries headed for a slowdown.

Sources quoted by Reuters said: “The Chinese pandemic and the challenges of reopening weigh on market sentiment and call into question the bullish thesis of a rebound in demand.”

Meanwhile, unscheduled maintenance on the US Colonial Pipeline revealed that Line 3 had been shut down for maintenance, with fuel flow resuming on January 7. Therefore, WTI recorded a slight jump on the day, reaching a daily high of $74.88.

According to market sources, inventories at the American Petroleum Institute registered an increase in US crude and gasoline. The data revealed by the US Energy Information Administration (EIA) agency showed that crude oil production rose by 100,000 to 12.1M vs. 12.0M of the previous data.

WTI Price Analysis: Technical Perspective

Despite Thursday’s price action showing a recovery in WTI prices, the black gold continues to be under lower pressure. WTI broke below the 50 and 20 day EMAs in the past two days and fell to fresh three-week lows at $72.50. The fact of not extending below the latter opened the door to the impression of a rise. However, bearish oscillators such as the Relative Strength Index (RSI) and the Rate of Change (RoC) herald further declines.

WTI key support levels lie at $73.00, followed by $72.50, ahead of the 2022 yearly low at $70.10.