- Crude Oil remains facing pressure as the IEA report adds to the bearish outlook.
- The monthly report from the IEA had no change on the narrative for the 2025 outlook.
- The US Dollar Index sees rally fade after US PPI numbers came in a touch stronger than expected.
Crude Oil steadies and consolidates recent losses after the International Energy Agency (IEA) released its monthly report for November on Thursday. The IEA follows the Organization of the Petroleum Exporting Countries (OPEC) outlook released earlier this week and has revised down its 2025 Oil demand forecast. Another downside revision adds more conviction to a bearish outlook on Oil prices in the long term.
The US Dollar Index (DXY), which tracks the performance of the Greenback against six other currencies, extended gains and reached a fresh year-to-date high above 107.00 ahead of the US trading session.
In the economic data front, the US Producer Price Index (PPI) for October came in a touch stronger than expected on Thursday, after the US Consumer Price Index (CPI) released on Wednesday fell broadly in line with expectations. All eyes will be on the Federal Reserve (Fed) Chairman Jerome Powell speech, scheduled at 20:00 GMT, with traders looking for clues on the December interest rate cut.
At the time of writing, Crude Oil (WTI) trades at $68.74 and Brent Crude at $72.57
Oil news and market movers: EIA data already priced in for a build up
- A privately owned Chinese refiner bought West African crude in a rare purchase. Normally, independent processors in China tend to favor imports from Iran and Russia, Bloomberg reports.
- Non-OPEC capacity will be boosted by new offshore conventional projects. Projects in Brazil, Guyana, and Norway are set to add to the already oversupplied market, according to the IEA's monthly Oil Market Report.
- In its report, the IEA lifted its forecast for this year's oil-demand growth but slightly trimmed next year's estimates, citing the impact of China's economic slowdown on consumption, Bloomberg reports.
- The US Energy Information Administration (EIA) will release its weekly Crude Oil price changes at 16:00 GMT. Expectation is for a build of 1.86 million barrels against the previous build of 2.149 million barrels last week.
Oil Technical Analysis: Limited upside
Crude Oil price is starting to show the pattern that precedes a breakout, with lower highs and higher lows. A breakout looks imminent from a purely technical point of view. With all these bearish elements taken into account, a break to the downside seems rather plausible than a pop to the upside.
On the upside, the 55-day Simple Moving Average (SMA) at $70.25 is the first barrier to consider before the hefty technical level at $73.58, with the 100-day Simple Moving Average (SMA). The 200-day SMA at $76.68 is still quite far off, although it could get tested in case tensions in the Middle East arise.
On the other side, traders need to look towards $67.12 – a level that held the price in May and June 2023 – to find the first support. In case that level breaks, the 2024 year-to-date low emerges at $64.75, followed by $64.38, the low from 2023.
US WTI Crude Oil: Daily Chart
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
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
EUR/USD gathers fresh upside traction and approaches 1.0580
Following an early dip to a new 2024 low at 1.0495, EUR/USD manages to regain some balance and retests the area of daily peaks near 1.0580 as the US Dollar's initial uptick seems to have run out of steam.
GBP/USD reclaims the 1.2700 barrier and above
In line with the rest of its risk-related peers, GBP/USD leaves behind the initial drop to multi-month lows near 1.2630 and attempts a move beyond 1.2700 the figure amidst renewed weakness in the Greenback.
Gold trims early losses hovers around $2,575
The loss of momentum in the US Dollar and the retracement in US yields across the curve allow Gold prices to pick up some upside traction and revisit the $2,570 zone per ounce troy, trimming part of their early losses.
Missing crypto influencer Kevin Mirshahi found dead in Montreal Park
Authorities report that the remains of Kevin Mirshahi, a prominent crypto influencer who was abducted in June, have been found in a Montreal park. Local police informed “The Gazette” that a passerby found the grim discovery on October 30 in Île-de-la-Visitation Park.
Trump vs CPI
US CPI for October was exactly in line with expectations. The headline rate of CPI rose to 2.6% YoY from 2.4% YoY in September. The core rate remained steady at 3.3%. The detail of the report shows that the shelter index rose by 0.4% on the month, which accounted for 50% of the increase in all items on a monthly basis.
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.