EIA inventories showed another decline for last week

Oil Downtrend in Question on OPEC Meeting, EIA Inventories and FED

Posted Wednesday, February 1, 2023 by
Skerdian Meta • 2 min read

Crude Oil has been bearish since June last year with central banks picking up the pace of rate hikes and the global economy heading into a recession. US WTI crude fell to $70 lows but formed a support zone around there and made a decent bullish move during most of January, as the USD decline resumed on slower US consumer inflation.

But, buyers failed to push above the 100 SMA (green) again on the daily chart, which has been acting as resistance and it rejected the price again toward the end of last month. We decided to open a sell Oil signal up there and at some point, we were more than $4 in profit, as the price of the US WTI fell below $77.

US WTI Oil Daily Chart – The 100 SMA Remains As Resistance

Yesterday we saw a bounce after the US employment costs report

There’s a strong chance the weekly private oil inventory data was leaking ahead of the release. We’ve seen several weeks of big moves in oil ahead of the report, only for oil to hold relatively stable — if not reversing — when the bearish data was released. Yesterday was something of the opposite with Oil looking like it was breaking down, only to reverse in North American trade and settle $1 higher and end up above $79.

API Inventories Via Twitter:

spr api oil 01 February 2023

Expectations earlier centred on:

Headline crude +0.4 mn barrels
Distillates -1.3 mn bbls
Gasoline +1.4 mn

Later today we have the US EIA crude Oil inventories which should follow the API numbers from yesterday, while the OPEC-JMMC meeting is underway, on top of the FED meeting later today and the BOE and ECB meetings tomorrow. So, there are plenty of risk events for the market sentiment and crude Oil and as a result, we’re holding on to our sell Oil signal. We opened this trade at around $81.50 as buyers were finding it hard to push above the 100 SMA and now we’ll see if the larger downtrend will resume in full.

US WTI Crude Oil Live Chart

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