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Crude Oil whips on Wednesday, surge in risk appetite sparks recovery in barrel bids

WTI hits two-month low before recovering into familiar territory.
US CPI inflation eased further, bolstering rate cut hopes.
EIA barrel counts posted a steeper contraction than expected.

Joshua Gibson FXStreet

West Texas Intermediate (WTI) US Crude Oil sank to an eight-week low on Wednesday, tumbling below $76.40 before recovering into $78.40. Broad-market risk appetite surged during the US market session after falling US Consumer Price Index (CPI) inflation sparked further market hopes for Federal Reserve (Fed) rate cuts.

US CPI inflation eased in April, falling to 0.3% MoM compared to the forecast hold at 0.4%, and market bets on Fed rate cuts sparked a broad recovery in risk appetite, sending Crude Oil higher. Easing inflation helped bolster rate cut speculation, and the CME’s FedWatch Tool shows that rate markets are pricing in over 70% odds of a September rate trim from the Fed.

According to the Energy Information Administration (EIA), week-on-week Crude Oil Stocks Change fell faster than expected. EIA barrel counts decreased by -2.508 million barrels in the week ended May 10, below the forecast -1.35 million and slipping further back from the previous week’s -1.362 million barrel decline. With US Crude Oil reserves falling on a weekly basis, Crude Oil barrel bids found even further support as energy markets look for signs that US Crude Oil production will fail to meet or beat market demand.

WTI technical outlook

US Crude Oil dipped to a two-month low near $76.40 on Wednesday, tumbling through a near-term demand zone before quickly recovering back above the $78.00 handle. WTI remains on the bearish side, trading on the south side of the 200-hour Exponential Moving Average (EMA) at $78.70.

Daily candles show WTI stuck in recent consolidation, just below the 200-day EMA at $79.28 as energy markets struggle to develop bullish momentum. WTI is down around ten percent from April’s peaks near $87.00.

WTI hourly chart

WTI daily chart

WTI US OIL

Overview
Today last price	78.41
Today Daily Change	0.37
Today Daily Change %	0.47
Today daily open	78.04

Trends
Daily SMA20	80.48
Daily SMA50	81.51
Daily SMA100	78.28
Daily SMA200	79.72

Levels
Previous Daily High	78.91
Previous Daily Low	77.29
Previous Weekly High	79.56
Previous Weekly Low	76.71
Previous Monthly High	87.12
Previous Monthly Low	80.62
Daily Fibonacci 38.2%	77.91
Daily Fibonacci 61.8%	78.29
Daily Pivot Point S1	77.25
Daily Pivot Point S2	76.46
Daily Pivot Point S3	75.63
Daily Pivot Point R1	78.87
Daily Pivot Point R2	79.71
Daily Pivot Point R3	80.5

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.

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