wti update

Feb 8, 2023

Trader reaction to the short-term 50% level at $77.77 will determine the direction of April WTI crude oil into the close on Tuesday.

Bullish Scenario
A sustained move over $77.77 will indicate the presence of buyers. Taking out the minor top at $78.28 will indicate the buying is getting stronger with the resistance cluster at $79.76 – $80.01 the next likely target.

Bearish Scenario
A sustained move under $77.77 will signal the presence of sellers. The first downside target is a minor pivot at $75.18, followed by $72.64.

Feb 9, 2023

Note

The major concerns that could put a lid on crude oil prices over the near-term are rising U.S. commercial inventories, potentially entrenched inflation and the uncertainty over how long the Fed will raise rates and at what level will they stop increasing rates.

Crude oil stocks in the United States rose last week to their highest level since June 2021, helped by higher production, the Energy Information Administration said. U.S. gasoline stocks also rose the week-ending Feb. 3.

Meanwhile, New York Federal Reserve President John Williams came across as hawkish on Wednesday when he said the Fed funds could reach 5.00% – 5.25%. His comments were bearish for commodities and risky assets that were supported the day before by Fed Chair Jerome Powell’s less-hawkish remarks.

Optimism over demand from China may provide some support, but the jump in demand could also keep inflation entrenched, which means rates are going to have to stay higher for longer. This will also raise the chances of a harder than expected global recession.