- Western Texas Intermediate (WTI) ended the week down 0.55%.
- Demand from China and the weakness of the US dollar supported oil prices.
- WTI buyers, unable to break the 50 day EMA, maintain the commodity’s bearish bias.
The WTI is about to end Friday’s session almost sideways as Wall Street ended the day with strong gains amid hopes of a Fed pivot as cables mention Fed officials discussing to curb the pace of rate increases after November meeting. At the time of writing, WTI is trading at $85.17 a barrel, up 0.19% minimum.
WTI trimmed earlier losses on the back of dollar weakness and demand from China.
With the possibility that the Fed will ease its aggressiveness, the dollar fell, which was a tailwind for dollar-denominated commodities. US Treasury yields retraced earlier gains, undermining the dollar, which, as its Dollar Index shows, fell 0.88% to 111,865, after hitting a yearly high of 113,942.
Apart from this, oil prices rose in choppy trading on the prospect of more robust demand from China. News that the country could ease quarantine restrictions on overseas visitors from 10 to 7 days spurred a jump in oil prices.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies decided to cut oil production amid weakening global economic prospects, which threaten to plunge the world’s largest economies into recession. OPEC+ withdrew 2 million barrels per day, in a decision widely criticized by the White House, which reacted negatively to the decision.
WTI Price Forecast
Western Texas Intermediate (WTI) made up some ground during the session and is holding on to the 20-day EMA at $85.13 bps as volume dries up. On the week, the US crude oil benchmark was unable to trade above its 50-day EMA at $86.80, meaning risks remain to the downside.
Therefore, the first support for WTI would be the Oct 18 daily low at $82.10, followed by the Sept 30 swing low at $79.16 and then a retest of the yearly low at $76.28.
Source: Fx Street
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