|

WTI tumbles amid global economic jitters, surging US gasoline inventories

  • WTI experiences a sharp 1.50% drop, extending losses amidst global economic slowdown fears and hedge fund liquidations.
  • OPEC+ maintains current production levels despite the WTI price slide, with no indication of extending cuts into 2024.
  • US business activity decelerates, while the Eurozone economy faces potential contraction in the upcoming quarter, per HCOB PMIs.

West Texas Intermediate (WTI), the US crude oil benchmark, dropped almost 1.50% on Thursday, extending its losses to two straight days amid renewed fears of a global economic slowdown. Even though OPEC+ countries aim to keep a narrow supply, WTI price slides below $83.000 per barrel after hitting a daily high of $84.88.

Oil price slumps below $83, on traders booking profits, OPEC+ decision, economic concerns

On Wednesday, oil prices slid more than $5, according to sources cited by Reuters, due to “heavy hedge fund liquidation on fears that higher interest rates with inflation keep sapping fuel demand.” In the meantime, a sharp jump in gasoline inventories in the US warranting that demand was weak in the last week.

The Organization of Petroleum Exporting Countries and allies – also known as OPEC+, stick to its current oil production, which included recent output cuts of 1.3 million barrels by Saudi Arabia and Russia, extended into the end of 2023. The OPEC+ did not mention if those cuts would be prolonged until 2024.

Regarding the global economic outlook, business activity in the US slowed down, while the Eurozone (EU) economy would likely shrink in the last quarter, according to HCOB’s Services and Composite PMIs.

WTI Price Analysis: Technical outlook

Oil price is dropping below the latest cycle high before WTI reached a year-to-date (YTD) high of $94.99, at around $84.85. In doing so, the 50-day moving average (DMA) was surpassed, putting into play a test of the $80.00 figure. A breach of the latter would expose the 200-DMA at $77.47, which, once cleared, could open the door to test last year’s low of $70.10. Conversely, if oil prices jump above the 50-DMA at $85.03, the following resistance would be the $90.00 mark.

WTI US OIL

Overview
Today last price81.86
Today Daily Change-1.59
Today Daily Change %-1.91
Today daily open83.45
 
Trends
Daily SMA2088.97
Daily SMA5084.57
Daily SMA10078.45
Daily SMA20077.39
 
Levels
Previous Daily High88.51
Previous Daily Low83.18
Previous Weekly High93.98
Previous Weekly Low87.74
Previous Monthly High93.98
Previous Monthly Low83.09
Daily Fibonacci 38.2%85.22
Daily Fibonacci 61.8%86.47
Daily Pivot Point S181.59
Daily Pivot Point S279.72
Daily Pivot Point S376.26
Daily Pivot Point R186.91
Daily Pivot Point R290.38
Daily Pivot Point R392.24

Author

Christian Borjon Valencia

Christian Borjon began his career as a retail trader in 2010, mainly focused on technical analysis and strategies around it. He started as a swing trader, as he used to work in another industry unrelated to the financial markets.

More from Christian Borjon Valencia
Share:

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

By subscribing you agree to our Terms and conditions.

Editor's Picks

EUR/USD holds around 1.1750 after weak German and EU PMI data

EUR/USD maintains its range trade at around 1.1750 in European trading on Tuesday. Weaker-than-expected December PMI data from Germany and the Eurozone make it difficult for the Euro to find demand, while investors refrain from taking large USD positions ahead of key employment data.

GBP/USD climbs above 1.3400 after upbeat UK PMI data

GBP/USD gains traction and trades in positive territory above 1.3400 on Tuesday as the British Pound benefits from upbeat PMI data. Later in the day, crucial data releases from the US, including Nonfarm Payrolls, Retail Sales and PMI, could trigger the next big action in the pair.

Gold retreats from seven week highs on profit-taking; all eyes on US NFP release

Gold price loses momentum below $4,300 during the early European trading hours on Tuesday, pressured by some profit-taking and weak long liquidation from the shorter-term futures traders. Furthermore, optimism around Ukraine peace talks could weigh on the safe-haven asset like Gold.

US Nonfarm Payrolls expected to point to cooling labor market in November

The United States Bureau of Labor Statistics will release the delayed Nonfarm Payrolls (NFP) data for October and November on Tuesday at 13:30 GMT. Economists expect Nonfarm Payrolls to rise by 40,000 in November. The Unemployment Rate is likely to remain unchanged at 4.4% during the same period.

NFP preview: Complex data release will determine if Fed was right to cut rates

The long wait is over, and the Bureau of Labor Statistics in the US will release nonfarm payrolls reports for both November and October at 1330 GMT on Tuesday. The overall NFP figure for October is expected to be -10k, however, it is expected to be influenced by a massive 130k drop in federal department workers. 

BNB Price Forecast: BNB slips below $855 as bearish on-chain signals and momentum indicators turn negative

BNB, formerly known as Binance Coin, continues to trade down around $855 at the time of writing on Tuesday, after a slight decline the previous day. Bearish sentiment further strengthens as BNB’s on-chain and derivatives data show rising retail activity.