- WTI rallied into $78.00 per barrel on Wednesday.
- EIA reported another drawdown in US Crude Oil inventories.
- Markets further bolstered by a potential Fed rate cut in September.
West Texas Intermediate (WTI) US Crude Oil jumped back into $78.00 per barrel on Wednesday after the Energy Information Administration (EIA) reported another steeper-than-expected decline in US Crude Oil Stocks Change, adding to a recent downswing in US barrel counts. The Federal Reserve (Fed) held rates steady as markets broadly expected, with a path forward for a September rate cut, helping to bolster commodity risk sentiment.
According to the EIA, US Curde Oil Stocks Change for the week ended July 26 contracted another -3.436 million barrels, far below the forecast -1.6 million barrel decline and piling onto the previous week’s -3.471 million contraction in US Crude Oil supplies. The EIA noted that US Crude Oil output fell in May for the first time since January, but also highlighted that US supplied products of fossil fuel and petroleum products hit its highest levels since August of 2023.
The Fed stood pat on interest rates for the July rate call as markets had broadly forecast, and cautiously-optimistic statements from Fed Chairman Jerome Powell helped keep broad-market risk appetite bid into the high side after the Fed head laid out the blueprint for what the Fed would like to see in key data prints ahead of the September 18 rate call. The Fed is hoping for one last round of inflation data to confirm that price growth is headed for the 2% annual target, and continued easing in US labor figures.
Elsewhere, Crude Oil risk aversion took a step higher on Wednesday following confirmation that the leader of Iranian Hezbollah’s air force was assassinated this week. According to unconfirmed reports, Iranian officials are calling for military action against Israel in retaliation, a move that would see Iran step fully into the Israel-Palestine conflict. An escalation of involvement in the Gaza conflict would see shockwaves through global Crude Oil markets.
WTI technical outlook
WTI US Crude Oil recovered significant ground on Wednesday, rallying 5% from Tuesday’s eight-week low of $74.24. In a steep, one-sided recovery rally, WTI topped $78.00.
US Crude Oil remains notably on the soft side despite Wednesday’s recovery bid, trading on the low end of the 200-day Exponential Moving Average (EMA) just above $79.00, and price action is swamped out on the bearish side of a downside run that saw WTI close in the red for all but four of the last 18 consecutive trading days.
WTI hourly chart
WTI 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 13 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 holds firm above 1.1100 ahead of US inflation data
EUR/USD clings to marginal gains above 1.1100 in the European session on Tuesday. The pair firms up as the US Dollar extends pullback as traders resort to repositioning ahead of the key US CPI data release. ZEW Survey - Economic Sentiment in the Eurozone improved to 11.6 in May from -18.5 in April.
GBP/USD stays well bid near 1.3200 after UK employment data
After posting large losses on Monday, GBP/USD trades marginally higher at around 1.3200 in the European session on Tuesday. The data from the UK showed that the ILO Unemployment Rate edged higher to 4.5% in the three months to April, as expected.
Gold price recovers as US-China trade agreement euphoria fades quickly
Gold rebounds and trades near $3,260 at the time of writing on Tuesday, recovering from the 2.65% drop the previous day after the US-China trade deal was announced. Traders are starting to get wary about the lack of detail in the announcement, and another flare-up could propel bullion back toward the record high set last month.
US CPI set to show stable inflation in April as markets weigh early impact of tariffs
The high-impact United States Consumer Price Index (CPI) inflation report for April will be published by the Bureau of Labor Statistics on Tuesday at 12:30 GMT. The inflation index is forecast to rise at an annual rate of 2.4% in April, at the same pace as in March. The core CPI inflation is expected to stay at 2.8% year-over-year (YoY) in the reported period.
Rising after the thaw: China's economy post-trade truce
The U.S. and China agreed to temporarily roll back tariff rates on each other this past weekend. “Temporary” defined as a trade truce for the next 90 days, which despite being provisional, is significant given the harsh escalation in tensions just a month ago. Trade developments between the U.S. and China have once again moved quickly.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.