WTI surges from YTD lows and gains more than 9% in the week
|- US Department of Commerce reported that PCE was below estimates, spurring speculations for a Fed shift.
- Oil prices rise after output reduction at several oilfields in northern Iraq’s Kurdistan region.
Western Texas Intermediate (WT), the US crude oil benchmark, is set to finish the week with more than 9% gains after touching a YTD low of $64.41. On Friday, WTI is trading at $75.60 PB, above its opening price by 1.74%.
Wall Street finished the week with substantial gains. Inflation data in the United States (US) reported by the Department of Commerce showed that Personal Consumption Expenditure (PCE) Index rose below estimates. Headline inflation came at 5% YoY, below forecasts of 5.3%, and core PCE was 4.6% YoY, below estimates.
Hence, the odds that the US Federal Reserve (Fed) could pause tightening its policy increased. The CME FedWatch Tool shows that the odds for a pause lie at 49.6%. The latest round of inflation data pointing down improved investors’ mood, meaning that less aggressive rate hikes could keep the US Dollar in check.
Oil prices jumped since the halt of Kurdistan oil export through Turkey at the beginning of the week. The total amount of oil shortage was 450K BPD.
In the meantime, according to Reuters sources, the Organization of Petroleum Export Countries (OPEC) agreed to stick to its crude output production at a meeting on Monday.
According to a survey conducted by Reuters, OPEC’s crude oil production for the current month is estimated at 28.90 million barrels per day BPD, which is a decrease of 70K BPD compared to February. Moreover, the current output is more than 700K BPD lower than what was recorded in September.
WTI Technical levels
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