Oil Prices Hold Near $69.63 as Fed Rate Cut and Sanctions Loom
Oil prices were little changed early Wednesday as investors sat on the sidelines ahead of the US Federal Reserve’s rate cut.
Brent rose 12 cents to $73.31 a barrel and WTI added 11 cents to $70.19 a barrel.
Federal Reserve’s Policy Decision in Focus
Oil prices were little changed early Wednesday as investors sat on the sidelines ahead of the US Federal Reserve’s rate cut. Brent rose 12 cents to $73.31 a barrel and WTI added 11 cents to $70.19 a barrel.
Impact of Sanctions on Oil Market Dynamics
In geopolitical news, the EU has imposed its 15th package of sanctions on Russia over Ukraine, targeting 33 more vessels from Russia’s shadow fleet used to transport crude or petroleum products. Britain has also sanctioned 20 ships for carrying Russian oil. While these sanctions aim to disrupt Russia’s oil trade, they haven’t yet stopped Russia from participating in the global oil market. But new sanctions can still add volatility to oil prices.
U.S. Crude Inventory Data Signals Market Trends
On the US side, the American Petroleum Institute reported a 4.69 million barrel decline in US crude oil inventories for the week ending December 13. Gasoline inventories rose 2.45 million barrels and distillates 744,000 barrels. Analysts had expected a 1.6 million barrel draw. US Energy Information Administration will release its official oil storage data later today to give more color on supply and demand.
Technical Analysis Indicates Potential Price Movements
From a technical standpoint, WTI crude oil is consolidating around $69.63 with immediate resistance at $69.89. The 50-hour EMA at $69.87 is a key resistance level. A break above this could take prices to $70.51 and then $70.89.
But failure to break above the pivot could lead to a decline to $69.18 and then $68.80 and $68.32. RSI at 45.86 is bearish but neutral. Traders should watch these levels closely as WTI is between support and resistance and waiting for a clear breakout.
Conclusion: Oil will trade in a tight range as the market waits for the Fed’s decision and its impact on the economy. Be cautious. Geopolitics and inventory data will be key in the short term.
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