WTI Crude Oil Recovers to $77.36 Amid Declining US Inventories
WTI Crude Oil prices experienced a modest recovery on Wednesday, rising $0.40 or 0.5%, to $77.36 per barrel, following a sharp 7% decline over the previous three sessions. This uptick was mirrored in Brent crude futures for September, which also increased by $0.40 or 0.5%, reaching $81.41 a barrel as of 0650 GMT.
Impact of Declining U.S. Inventories on USOIL Price
The rebound in oil prices was supported by a notable decrease in U.S. crude oil, gasoline, and distillate inventories, which fell for the fourth consecutive week, according to data from the American Petroleum Institute (API). This consistent drop in inventories, culminating in a reduction of 3.9 million barrels in crude stocks for the week ending July 19, marks the first four-week consecutive decline since September 2023, signaling sustained demand in the U.S., the world’s largest oil consumer.
External Factors Influencing Crude Prices
Further contributing to the rise in oil prices were the ongoing wildfires in Canada, which have significantly disrupted production and posed threats to supply levels, according to ING analysts. Despite these challenges, market analysts remain optimistic about the potential for oil prices to ascend further in the third quarter, driven by a market environment that is nearing oversold territory and a prevailing supply deficit.
Moreover, geopolitical tensions and economic uncertainties continue to shape the market dynamics. The recent ceasefire talks between Israel and Hamas, mediated by Egypt and Qatar under a plan initiated by U.S. President Joe Biden, alongside concerns over an economic slowdown in China—the world’s largest crude importer—have exerted downward pressure on global oil demand expectations.
With official government data on oil inventory scheduled for release on Wednesday, stakeholders in the oil market are closely monitoring these developments to gauge future price movements in the WTI and Brent crude markets.
WTI Crude Oil Price Forecast: Technical Outlook
WTI Crude Oil is currently trading at $77.29, showing a slight increase of 0.19%. The 2-hour chart reveals key technical levels that are crucial for traders to monitor. The pivot point is positioned at $77.53, indicating the central point around which the price is expected to oscillate. Immediate resistance levels are identified at $78.82, $79.17, and $80.22. These levels suggest where the price may encounter selling pressure if it attempts to move higher.
On the downside, support levels are marked at $76.43, $75.20, and $74.04. These levels are critical as they represent potential areas where buying interest may emerge, preventing further declines. The RSI is currently at 35.72, indicating bearish momentum.
The 50-day Exponential Moving Average (EMA) stands at $78.82, while the 200-day EMA is at $77.29. The downward channel extending resistance near the $77.30 level implies that if the price fails to break above this level, it may lead to a continuation of the selling trend.
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