- Crude Oil took a hit on Wednesday after EIA crude stocks climbed again.
- Downstream oil products also rose significantly.
- Middle East complications continue to prop up Crude Oil on supply concerns.
West Texas Intermediate (WTI) US Crude Oil slipped from a fresh daily high after the Energy Information Administration (EIA) released their updated US Crude Oil stocks numbers, revealing another buildup of Crude Oil barrels, as well as burgeoning numbers of oil derivative products in supply lines.
Crude Oil prices popped early Wednesday after it was reported that Iran-backed Houthi rebels in Iran launched their largest wave of attacks to-date on civilian cargo ships in the waterways leading towards the Suez Canal. Houthis launched a combination of 21 drones and missiles at shipping vessels in the key waterway that connects supply lines between Europe and Asia.
No damage was reported and coalition naval forces from the US and the UK reported 100% destruction of all Houthi weapons that were in transit at the time. According to reporting by the BBC, citing US military sources, Houthi rebels in Yemen have carried out 26 attacks on commercial shipping vessels since November 19.
Despite the successful fending off of further rebel attacks, Crude Oil caught a fear-based bid as energy markets continue to fret about the possibility of conflicts hampering global trade in oil barrels. WTI climbed to $73.55 before getting knocked back once again after the EIA released their Crude Oil barrel counts for the week ended January 5, showing another buildup in both Crude Oil barrels and downstream oil derivatives.
According to the EIA, US Crude Oil Stocks climbed 1.338 million barrels versus the forecast 675K decline, taking a bite out of the previous week’s 5.5 million barrel decline.
Gasoline reserves also climbed well above expectations, adding a further 8.29 million barrels vs the expected 2.489 million. Oil Distillates also climbed 6.528 million versus the forecast 2.382 million uptick. The EIA also estimates that US Crude Oil production remained above 13 million barrels per day.
WTI Technical Outlook
WTI US Crude Oil stumbled back from Wednesday’s peak bids near $73.60 to retest the $72.00 handle as bids continue to get hampered by the 200-hour Simple Moving Average (SMA). Rough chop on the intraday level continues to be the name of the game, with WTI prices whipsawing in a rough range in the early weeks of 2024.
Daily candlesticks have WTI pressured into the low side, with near-term price action capped by a declining 50-day SMA with a technical ceiling priced in at the 200-day SMA near $78.00.
Technical momentum has drained out of the WTI chart as technical indicators drift into the midrange, and US Crude Oil remains down nearly 24% from last September’s top bids near $94.00.
WTI Hourly Chart
WTI Daily Chart
WTI Technical Levels
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD traders seem non-committed around 0.6500 amid mixed cues
AUD/USD extends its consolidative price move just above 0.6500 on Friday. The RBA's hawkish and upbeat market mood supports the Aussie, though mixed Australian PMI prints fail to inspire bulls. Moreover, bets for a slower Fed rate-cut path continue to fuel the post-US election USD rally and cap the currency pair.
USD/JPY slides to 154.00 as higher Japanese CPI fuels BoJ rate-hike bets
USD/JPY languishes near 154.00 following the release of a slightly higher-than-expected Japan CPI print, which keeps the door open for more rate hikes by the BoJ. That said, the risk-on mood, along with elevated US bond yields, could act as a headwind for the lower-yielding JPY and limit losses for the pair amid a bullish USD, bolstered by expectations for a less dovish Fed and concerns that Trump's policies could reignite inflation.
Gold price advances to near two-week top on geopolitical risks
Gold price touched nearly a two-week high during the Asian session as the worsening Russia-Ukraine conflict benefited traditional safe-haven assets. The weekly uptrend seems unaffected by bets for less aggressive Fed policy easing, sustained USD buying and the prevalent risk-on environment
Ethereum Price Forecast: ETH open interest surge to all-time high after recent price rally
Ethereum (ETH) is trading near $3,350, experiencing an 10% increase on Thursday. This price surge is attributed to strong bullish sentiment among derivatives traders, driving its open interest above $20 billion for the first time.
A new horizon: The economic outlook in a new leadership and policy era
The economic aftershocks of the COVID pandemic, which have dominated the economic landscape over the past few years, are steadily dissipating. These pandemic-induced economic effects are set to be largely supplanted by economic policy changes that are on the horizon in the United States.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.