- On Wednesday, WTI Oil slightly retraces from its five-day upward trend.
- Despite this minor pullback, oil traders remain optimistic as earlier bullish forecasts continue to materialize, particularly amidst ongoing supply disruptions.
- Concurrently, the US Dollar Index exhibits strength ahead of the Federal Reserve’s interest rate decision.
WTI Oil prices, although experiencing a slight decline today, remain robustly above the $80 mark, having surged more than 5% over the past five trading sessions. This recent uptrend has been fueled by supply constraints in Russia and the imperative to replenish US crude inventories, bolstering demand. Conversely, the recent dip in oil prices can be attributed to the US Dollar’s strengthened position.
Meanwhile, the US Dollar has also enjoyed a five-day winning streak, particularly gaining momentum during Asian trading hours on Tuesday following the Bank of Japan’s rate decision. As markets await the Federal Reserve’s monetary policy announcement, all eyes are on Fed Chairman Jerome Powell’s speech and the release of economic projections, notably the dot plot.
As of the latest update, WTI Crude Oil is trading at $81.46 per barrel, while Brent Oil is priced at $85.69 per barrel.
Oil news and market movers: EIA pivotal
- According to Bloomberg, Chinese Customs data indicates that China imported oil from Venezuela in February for the first time since 2019.
- Russian crude exports have experienced a decline due to maintenance work at the Baltic port of Primorsk, coupled with severe weather conditions, particularly strong winds, affecting shipments from the key oil ports, including Kozmino on the Pacific Coast. These challenges have resulted in a three-day delay in loading and shipping.
- Additionally, China has secured another batch of 2 million barrels from Abu Dhabi, purchased by Cnooc.
- In recent developments, the American Petroleum Institute (API) reported that the US crude stockpile is undergoing further drawdowns. Last week witnessed a drawdown of 5.521 million barrels, compared to 1.519 million barrels for the current week.
- Later today, at 14:30 GMT, the Energy Information Administration (EIA) is set to release its US stockpile figures. Expectations point to a minor build of 13,000 barrels, contrasting with the drawdown of 1.536 million barrels observed last week.
Oil Technical Analysis: Time for some profit-taking
Oil prices are poised for further upside momentum, driven by a combination of supply constraints and significant drawdowns in the US. This aligns with the strategic plan envisioned by OPEC+ to unfold, as the US struggles to sustain its consistent oil production to offset the OPEC+ oil cuts. With US production retracting and delays in Russian supply, upward pressure is mounting. FXStreet previously reported numerous bullish positions in the options markets, which are now materializing.
Bullish investors eye the $86 mark as the next resistance level, followed by $86.90, $89.64, and $93.98.
On the downside, both $80.00 and $80.60 are expected to provide support, with the 200-day Simple Moving Average (SMA) serving as a key level around $78.33 to prevent significant declines. Additionally, the 100-day SMA and the 55-day SMA near $75.56 and $76.35, respectively, further fortify the downside, with the pivotal level around $75.27 indicating strong resistance against selling pressure.
