WTI crude oil justifies Doji at multi-day high, OPEC+ verdict to drop below $87.00

• WTI crude oil prices stay pressured around intraday low after refreshing eight-year high the previous day.
• OPEC+ agrees to increase oil output by 400,000 bpd per month, EIA inventories mark surprise draw.
• Market sentiment sours amid pre-ECB, BOE anxiety, yields, DXY pare recent losses.
• Risk catalysts eyes, US data add importance to the busy day.

WTI crude oil prices print the heaviest daily fall in over a week, depressed around intraday low of $86.68 during early Thursday.

The oil benchmark refreshed the highest level since 2014 the previous day before stepping back from $88.75. In doing so, the quote printed a bearish Doji candlestick on the daily formation.

That said, the weekly official oil inventories, namely EIA Crude Oil Stocks Change, marked a surprise fall to -1.047M versus +1.525M market consensus and +2.377M prior. Also positive for the oil prices are the fears of Russian invasion of Ukraine as Moscow escalates military presence at the border.

On the contrary, the Organization of the Petroleum Exporting Countries and allies led by Russia, a group known as OPEC+, agreed to the previously announced terms of boosting crude output by 400,000 barrels per day (bpd) per month the previous day, per Reuters. “The 10 members of OPEC with quotas in the OPEC+ group increased production by about 210,000 bpd in January, while Russia's output rose by about 100,000 bpd, according to data published by Reuters,” the news adds.

Additionally, weighing on the oil prices is the market’s anxiety ahead of the key monetary policy meeting by the European Central Bank (ECB) and the Bank of England (BOE). Furthermore, comments highlighting inflation fears from US President Biden’s all three Nominees for the Fed Board hints at the Fed’s hawkish stand in the future and exert additional downside burden on the commodity prices.

Talking about the US data, ADP Employment Change for January surprised markets with -301K figures versus +207K expected, which in turn signal downbeat US jobs report for Friday and also weaken the risk appetite.

Looking forward, global traders may pay a little attention to energy prices with eyes on the ECB and BOE. However, markets are likely to remain sidelined, mostly risk-off, ahead of the aforementioned monetary policy decisions. Following that, US ISM Services PMI for January, expected 59.5 versus 62.0 prior, will also be important to watch further direction.

Technical analysis

A bearish candlestick near the multi-day high joins overbought RSI to hint at the WTI crude oil’s further weakness until the quote stays beyond the latest top near $88.75. However, an upward sloping trend line from December 20, around $86.70, tests the oil sellers before directing them to the 21-DMA level near $84.00.