• Speculations for further tightening by the Federal Reserve underpin the US Dollar, a headwind for oil prices.
  • China’s reopening and Russia expected to cut its oil production capped WTI’s fall.
  • WTI Technical analysis: Neutral to downward biased; once it breaks $75.00, a retest of monthly lows is likely.

Western Texas Intermediate (WTI), the US crude oil benchmark, is erasing Monday’s gains which fell shy of reaching the 20-day Exponential Moving Average (EMA), and dropped towards the lows of the week around 75.97 before settling around the current price. At the time of typing, WTI is losing 0.94%, trading at 76.64 per barrel.

Oil prices affected by a strong US Dollar

The strong US Dollar (USD) narrative is hitting the commodities market. During the last week, Federal Reserve (Fed) officials continued their hawkish rhetoric while data supported some of their comments. Traders should remember that although Cleveland and St. Louis Fed Presidents Loretta Mester and James Bullard do not vote in the FOMC, both supported raising rates by 50 bps.

That spurred speculations that the US Federal Reserve (Fed) might hike rates not twice but three times, which could lift the Federal Funds Rate (FFR) to the 5.25%-5.50% mark.

Meanwhile, the US Dollar Index (DXY), which tracks the buck’s value vs. a basket of six currencies, advances 0.29%, up at 104.184, a headwind for dollar-denominated assets. Therefore, a strong USD makes oil prices expensive for foreign countries.

Aside from this, China’s reopening is a factor playing into WTI’s price, and capped oil prices fall in Tuesday’s session. Russia’s announced that it plans to cut production by 500,000 bpd or about 5% of its output in March as retaliation to the West imposing price caps on Russian oil and oil-related products.

Data-wise, US oil inventories and data, which were to be released on Tuesday, was postponed in observance of President’s Day and moved to Wednesday and Thursday.

WTI Technical analysis

From a technical perspective, WTI is still neutral to downward biased, capped by all the Exponential Moving Averages (EMAs) resting above oil’s price. In addition, the Relative Strength Index (RSI) is in bearish territory and is aiming downwards. The Rate of Change (RoC), albeit steadily, shows that sellers continue gaining momentum.

Hence, WTI’s first support would be $75.97. Once cleared, the oil price would tumble to the last week’s low at $75.36, followed by the MTD low at $72.30.

WTI US OIL

Overview
Today last price 76.64
Today Daily Change -0.77
Today Daily Change % -0.99
Today daily open 77.41
 
Trends
Daily SMA20 78.18
Daily SMA50 78.05
Daily SMA100 80.77
Daily SMA200 89.27
 
Levels
Previous Daily High 77.75
Previous Daily Low 76.33
Previous Weekly High 80.75
Previous Weekly Low 75.34
Previous Monthly High 82.68
Previous Monthly Low 72.64
Daily Fibonacci 38.2% 77.21
Daily Fibonacci 61.8% 76.88
Daily Pivot Point S1 76.58
Daily Pivot Point S2 75.75
Daily Pivot Point S3 75.16
Daily Pivot Point R1 78
Daily Pivot Point R2 78.59
Daily Pivot Point R3 79.42

 

 

Share: Feed news

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


Recommended content

Editors’ Picks

EUR/USD under pressure below 1.0400 on persistent USD strength

EUR/USD under pressure below 1.0400 on persistent USD strength

EUR/USD remains deep in the negative territory below 1.0400 on Tuesday, erasing a portion of Monday's gains. The pair is undermined by risk aversion and the persistent US Dollar demand, fuelled by US President Trump's tariff threats.

EUR/USD News
GBP/USD stays below 1.2300 after UK employment data

GBP/USD stays below 1.2300 after UK employment data

GBP/USD stays under bearish pressure and trades below 1.2300 on Tuesday as the USD preserves its strength following US President Trump's tariff threats. The data from the UK showed that the ILO Unemployment Rate edged higher to 4.4% in the three months to November.

GBP/USD News
Gold trades at multi-month highs above $2,720

Gold trades at multi-month highs above $2,720

Gold gathers bullish momentum and trades at its highest level since early November above $2,720 on Tuesday. The benchmark 10-year US Treasury bond yield is down more than 1% below 4.6% following US President Trump's tariff threats, helping XAU/USD hold its ground.

Gold News
Bitcoin fails to sustain the $109K mark after Trump’s inauguration

Bitcoin fails to sustain the $109K mark after Trump’s inauguration

Bitcoin’s price steadies above the $102,000 mark on Tuesday after reaching a new all-time high of $109,588 the previous day. Santiment’s data shows that BTC prices quickly corrected, as social media showed major greed and FOMO among the traders in Bitcoin after President Donald Trump’s inauguration.

Read more
Prepare for huge US trade changes as Trump goes America first

Prepare for huge US trade changes as Trump goes America first

You can be sure that big changes are coming as far as US trade is concerned, even if we didn't get any new tariffs on President Trump's first day in office. A comprehensive investigation into US trade relationships was initiated via a memorandum. China, Canada, and Mexico are clearly in the immediate firing line. 

Read more
Trusted Broker Reviews for Smarter Trading

Trusted Broker Reviews for Smarter Trading

VERIFIED Discover in-depth reviews of reliable brokers. Compare features like spreads, leverage, and platforms. Find the perfect fit for your trading style, from CFDs to Forex pairs like EUR/USD and Gold.

Read More

Forex MAJORS

Cryptocurrencies

Signatures