Buying the Dip in WTI Oil Again As Risk Sentiment Remains Positive
Crude Oil has retreated lower but is finding buyers already, so we decided to open another buy Oil signal
After multiple attempts by Saudi Arabia, the trajectory of crude Oil has shifted toward a bullish direction, where each decline in price is met with enthusiastic buying interest. The present upswing in Oil prices stands out as it has managed to surpass the previous peaks observed back in April. This achievement followed a remarkable turnaround earlier this week, a particularly striking signal which shows that the sentiment remains bullish here despite the prevailing negative market sentiment at the time.
During this occurrence, WTI crude Oil experienced a temporary drop below the $80 mark. However, the subsequent recovery was substantial, with prices rebounding from a low of $79.97 to reach a high of $84.90 earlier today, before the retreat today. Notably, we successfully identified and capitalized on this movement, initiating a buy signal for oil near its lowest point.
Yesterday, the US Energy Information Administration (EIA) released its weekly petroleum status report, revealing a rise in crude Oil inventories for the week ending on August 4th. The commercial EIA crude inventories in the United States, excluding those stored in the strategic petroleum reserve, saw a notable increase of 5.9 million barrels compared to the previous week. Despite that, Oil prices continued marching higher, which was another bullish sign.
Today, the market was anticipating that the United States would show higher consumer inflation (CPI). If the inflation rate remained to be elevated, it could give the US Federal Reserve more reason to maintain a hawkish stance. Many in the market believe that such a cautious approach from the Federal Reserve could have a negative impact on the economy. Consequently, this could potentially affect the demand for commodities like crude Oil. the headline CPI did increase by 2 points to 3.2% YoY, but expectations were for a bigger increase to 3.3%, while core CPI consumer inflation ticked lower to 3.7% from 3.8%, which is positive news for risk assets.
So, we decided to open another buying signal a while ago, as the price was retreating lower, with US WTI crude falling to $83.60. Although we are seeing some buying interest down here and the stochastic indicator is oversold on the H1 chart, which looks like a signal to go long, hence our buy Oil trade.
US WTI Crude Oil Live Chart
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