WTI Crude Oil Price Remains Steady at $79.15 Amid U.S. Stockpile Data Await
WTI Crude Oil prices remained relatively stable on Thursday as the market awaited the release of U.S. crude oil stockpile data. Resilient
WTI Crude Oil prices remained relatively stable on Thursday as the market awaited the release of U.S. crude oil stockpile data. Resilient U.S. economic activity suggested that borrowing costs might remain elevated for an extended period, potentially dampening oil demand.
“The broader risk-off environment has translated to some downward pressures on oil prices, which overrides the larger-than-expected drawdown in U.S. crude inventories from the recent API data,” stated Yeap Jun Rong, market strategist at IG.
API Data Highlights Inventory Changes
The American Petroleum Institute (API) reported a significant drawdown in U.S. crude oil and gasoline inventories last week, with crude stocks decreasing by 6.49 million barrels, gasoline inventories down by 452,000 barrels, and distillates rising by 2.045 million barrels.
Analysts had expected a 1.9 million barrel decrease in crude inventories, a 1 million barrel reduction in gasoline stocks, and a 0.4 million barrel increase in distillates. The Energy Information Administration (EIA) is set to release its data later on Thursday.
Upcoming OPEC+ Meeting Could Influence Prices
The upcoming OPEC+ meeting on June 2 is also a critical factor for oil prices. Rising global oil inventories due to soft fuel demand in April may prompt OPEC+ producers, including the Organization of the Petroleum Exporting Countries (OPEC) and allies such as Russia, to maintain their supply cuts.
“A greater driver for oil prices ahead may revolve around the upcoming OPEC+ meeting this weekend, which could see OPEC members extending their current production cuts potentially till the end of the third quarter to support prices,” added Yeap.
Impact of U.S. Economic Activity on Oil Demand
Despite an expansion in U.S. economic activity from early April to mid-May, businesses have grown more pessimistic about the future, and inflation has increased at a modest pace, according to a Federal Reserve survey.
Higher borrowing costs generally restrain funds and consumption, negatively impacting crude demand and prices. The Federal Reserve is now expected to cut rates in September at the earliest, a delay from the previously anticipated June start.
In conclusion, the WTI Crude Oil price forecast remains cautiously optimistic as markets await inventory data and the OPEC+ meeting. Key factors to watch include U.S. economic indicators, Federal Reserve policies, and decisions made by OPEC+ regarding production cuts.
WTI Crude Oil Price Forecast: Technical Outlook
WTI Crude Oil (USOIL) is trading at $79.14, down 0.13%. The pivot point, marked in green, is set at $78.87, serving as a critical level for market direction. Immediate resistance is at $80.60, followed by $81.54 and $82.44. Support levels are at $77.84, $77.08, and $76.13.
The Relative Strength Index (RSI) is at 52, indicating neutral momentum. The 50-day Exponential Moving Average (EMA) is positioned at $78.74, which supports a bullish outlook if prices stay above this level. USOIL’s current price above the pivot point suggests a bullish bias.
However, a break below $78.87 could trigger a sharp selling trend. In conclusion, the outlook for USOIL remains bullish above the pivot point of $78.87. Traders should watch for resistance at $80.60 and support at $77.84 for potential market movements.
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