WTI pullback on surprising US inventory build, strong USD
|- WTI trades at $87.80, down 0.33%, after US crude inventories show a 4 million barrel increase, defying expectations.
- US inflation report reveals a 3.7% YoY rise in August, driven by a 10.6% increase in retail gasoline prices.
- Technical outlook suggests WTI could test support at $87.23; resistance levels emerge at $88.00 and year-to-date high of $88.99.
Western Texas Intermediate (WTI), the US crude oil, trims some of its daily gains spurred by a build on US oil inventories amid expectations for a drop. This and the latest US inflation report in the United States (US) boosted the Greenback (USD), a headwind for US dollar-denominated assets. WTI is trading at $87.80, down 0.33%.
WTI retreated amid unexpected surge in US inventories, rising US Dollar
The latest US crude oil inventories showed an increase of 4 million barrels last week, crushing estimates gathered by a Reuters poll for a 1.9 million barrel contraction, in data revealed by the US Energy Information Administration (EIA). Additional data showed that fuel demand dropped as the summer driving period in the US ended in the September 4 Labor Day Holiday.
The latest inflation report in the US showed headline inflation rose by 3.7% YoY in August, above estimates propelled by a 10.6% increase in retail gasoline prices. Contrarily, excluding volatile items like food and energy, inflation slowed from 4.7% to 4.3% YoY.
Oil prices had remained underpinned by Saudi Arabia and Russia’s voluntary oil production cut as both countries slashed 1.3 million barrels from the market.
WTI Price Analysis: Technical outlook
After rising to a 10-month high, WTI retraced below the September 12 daily close of $88.18 per barrel. A daily close below that level could pave the way for a pullback toward the top of an ascending-triangle top-trendline turned support at $87.23 before slumping to the $87.00 figure. A breach of the latter will expose the September 8 daily low of $85.65, ahead of slumping below the $85.00 figure. Conversely, WTI’s first resistance would be the $88.00 figure before cracking the YTD high of $88.99.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.