Looking to Sell the Comeback in Oil Around $70
Crude Oil has been bearish since September, after WTI failed to reach $100/barrel and the price fell below $70 last week. On Tuesday, US WTI crude Oil fell by more than 4% as the CPI (Consumer Price Index) inflation data fueled fears among traders that the Federal Reserve may not be ready to lower interest rates by more than 100 bps in 2024, as markets had priced in. The January West Texas Intermediate contract fell $3.40 lower, or 3.80%, as it dipped below $68 per barrel, but made a reversal yesterday and kept approaching the $70 level, with the FED also helping the matter.
The reversal began after news that a tanker in the Red Sea off Yemen’s coast was shot on by gunmen in speedboats and targeted with missiles. Later on, the EIA inventories showed a larger-than-expected draw, which also helped buyers. However, the USD weakness following the FOMC meeting, where Jerome Powell mentioned rate cuts was the last factor to help Oil approach the $70 level, where we are planning on opening a long-term sell Oil signal, since fundamentals are still bearish.
Weekly US Oil Inventory Report for Week Ending Dec 8
- EIA weekly US crude oil inventories -4259K vs -650K expected
- Last week’s inventory was -4632K
- Crude -4259K vs -650K expected
- Gasoline +408K vs +1933K expected
- Distillates +1494K vs +623K expected
- Refinery utilization -0.3% vs +0.3% expected
- Production 13.1 mbpd vs 13.1mbpd prior
- Implied mogas demand: 8.86Mbpd
Late yesterday, the API reported:
- Crude -2349K
- Gasoline -5800K
- Distillates +300K
US WTI Crude Oil Live Chart
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