Crude Oil recedes further, WTI falls below $78 on rising supplies and cautious FOMC

WTI declines for a third straight day on Wednesday.
US barrel counts hint at further supply overhang.
FOMC Meeting Minutes reveal cautious Fed, rate hopes stumble.

Joshua Gibson FXStreet

West Texas Intermediate (WTI) US Crude Oil declined for a third straight day on Wednesday, falling below $78.00 per barrel once again after US Crude Oil barrel counts rose week-on-week after a previous decline. The Federal Reserve’s (Fed) latest Meeting Minutes revealed the Federal Open Market Committee (FOMC) remains stubbornly committed to waiting for firmer signs that US inflation will continue easing towards the Fed’s 2% annual target, vexing rate cut hopes and knocking risk sentiment lower in the midweek market session.

According to the Energy Information Administration (EIA), US Crude Oil Stocks through the week ended May 17, climbing 1.825 million barrels, well above the median market forecast of a -3.1 million barrel decline. The week-on-week EIA barrel count chewed through most of the previous week’s -2.508 million barrel drop, reigniting concerns that US Crude Oil production threatens to swamp demand.

Crude Oil over-production concerns rose further on Wednesday after Russia announced an accidental overproduction of Russian Crude, with the nation pointing a finger at “technical difficulties”. According to sources, Russia’s Energy Minister will be putting options for voluntary output cuts “under review. Russia is expected to present a plan to offset additional production to OPEC+, the extended group of associate states aligned with the inner core of the Organization of the Petroleum Exporting Countries (OPEC).

WTI technical outlook

WTI US Crude Oil is testing down into $77.00 per barrel, extending a near-term decline from a recent peak just above $80.00 per barrel. Intraday price action has tumbled back into a familiar demand zone below $78.00 per barrel, and risks further downside if it breaks down below $76.50.

WTI closed in the red for a third consecutive trading day on Wednesday, increasing the odds of an extended technical rejection from the 200-day Exponential Moving Average (EMA) at $79.25.

WTI hourly chart

WTI daily chart

WTI US OIL

Overview
Today last price	77.05
Today Daily Change	-1.08
Today Daily Change %	-1.38
Today daily open	78.13

Trends
Daily SMA20	79.61
Daily SMA50	81.58
Daily SMA100	78.58
Daily SMA200	79.62

Levels
Previous Daily High	79.24
Previous Daily Low	77.62
Previous Weekly High	79.63
Previous Weekly Low	76.38
Previous Monthly High	87.12
Previous Monthly Low	80.62
Daily Fibonacci 38.2%	78.24
Daily Fibonacci 61.8%	78.62
Daily Pivot Point S1	77.42
Daily Pivot Point S2	76.71
Daily Pivot Point S3	75.8
Daily Pivot Point R1	79.04
Daily Pivot Point R2	79.95
Daily Pivot Point R3	80.66

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

EUR/USD deflates to fresh lows, targets 1.1600

The selling pressure on EUR/USD now gathers extra pace, prompting the pair to hit fresh multi-week lows in the 1.1625-1.1620 band on Friday. The continuation of the downward bias comes in response to further gains in the US Dollar as market participants continue to assess the mixed release of US Nonfarm Payrolls in December.

GBP/USD breaks below 1.3400, challenges the 200-day SMA

GBP/USD remains under heavy fire and retreats for the fourth consecutive day on Friday. Indeed, Cable suffers the strong performance of the Greenback, intensified post-mixed NFP, and trades at shouting distance from its critical 200-day SMA near 1.3380.

Gold flirts with yearly tops around $4,500

Gold keeps its positive bias on Friday, adding to Thursday’s advance and challenging yearly highs in the $4,500 region per troy ounce. The risk-off sentiment favours the yellow metal despite the firmer tone in the Greenback and rising US Treasury yields.