WTI retraces from session highs above $ 80.00

• WTI has retraced from session highs above $ 80 as US stocks are under selling pressure at the open.
• But oil may continue to trade better than equities, which are suffering from the Fed’s aggressive line, if the demand outlook remains strong.

Amid the selling pressure of US stocks at Tuesday’s share open, WTI futures of the previous month they have retreated from the highs of the previous session above $ 80 per barrel and are now trading in the $ 79.00 zone again. That still leaves WTI prices about 50 cents higher for the day and oil bulls will still be on the lookout for a test of last week’s highs in the $ 80.50 zone. In fact, oil strategists continue to believe that the spread of the Omicron variant is unlikely to leave a significant dent in oil demand in the short term.

Meanwhile, despite the recent aggressive line shift in market expectations for the Fed’s tightening that has hit US and global equities, with four increases now seen in 2022 alongside quantitative tightening, the outlook for global growth in 2022 it is still strong. This is what matters most for demand rather than crude oil markets focused on financial conditions. The implication could be that, in the coming weeks / months, as long as the Fed’s adjustment is not viewed as a “policy error” (ie, it slows down the economy unnecessarily), oil may remain a relatively risky asset. Safe even if the Fed’s tightening expectations continue to weigh on stocks.

OPEC supply issues continue to make headlines and could also offer some support to price action. Libya has faced further setbacks in its efforts to bring production to 2021 production peak levels of about 1.3 million barrels per day (BDP). The country’s National Petroleum Corporation (NOC) said on Tuesday it would suspend oil exports from its Es Sider terminal due to bad weather and lack of storage. As a result, his Waha Oil Co. (which exports oil through the Es Sider terminal) would be reducing production by 50,000 BPD and this could increase to 105,000 BPD. Despite this, the NOC said production returned to 896,000 BPD from the 729,000 BPD reported last week.

Going forward, US private oil inventory data is scheduled to release at 21:30 GMT ahead of Wednesday’s official US inventory report from the EIA, showing a seventh consecutive week of withdrawals. , and a further 2 million barrel drop in stocks is expected.

Technical levels