- Oil prices edge higher for the third straight day on Friday.
- Traders see both bearish and bullish elements in the mix, which could see Oil prices close off this week flat.
- The US Dollar Index trades above 104.00 after its steep decline on Thursday.
Oil prices are being torn in half, with several bearish and bullish elements in the balance. Although Oil started the week on the back foot, it is possibly on track to minimize the incurred losses for this week and might even be flat overall by Friday’s close. The question will be how much front running will take place this summer ahead of the initial interest rate cut by the US Federal Reserve (Fed) expected in September and assumptions that demand will boom on the back of that.
Meanwhile, the US Dollar Index (DXY), which tracks the performance of the US Dollar against six major currencies, is building on its road to recovery after the meltdown it went through on Thursday after US Consumer Price Index (CPI) data for June showed a pickup in disinflation. Markets scrambled to lock in an interest rate cut for September, which means the value of the US Dollar had to be adjusted because of the rate differential with other currencies getting narrower. On Friday, traders will be looking if the producer side of the economic system is seeing disinflation picking up as well with June’s Producer Price Index (PPI) release.
At the time of writing, Crude Oil (WTI) trades at $82.08 and Brent Crude at $85.19
Oil news and market movers: Not enough demand
- Bloomberg reports that China’s Oil imports remained steady throughout June despite local lacklustre demand. That was different for Liquified Natural Gas (LNG), where imports declined substantially for the same period.
- The Port of Houston is fully reopened, with vessel traffic back to normal on Thursday, Reuters reports. The Port was shut down after Hurricane Beryl passed through the region at the beginning of the week.
- Oil futures have seen a pickup in demand since Thursday, with traders positioning for a surge in demand near September, when the Fed is expected to cut interest rates. Currently postponed construction projects should be set to restart again, according to Reuters.
- The Wall Street Journal reports that the International Energy Administration revised down its recent 2025 forecast. Supply is set to swell with OPEC unwinding its production cuts, while demand is set to decline from 1 million to 980,000 barrels per day. This would leave the Oil markets with a surplus supply .
Oil Technical Analysis: A long road ahead
Oil prices are in the green for a third day in a row, and should the recovery pick up a little bit on Friday, the performance could close off flat and avoid a weekly loss. For next week, if Crude can pull off a daily close above the green ascending trend line in the chart below, that would be a bullish signal for traders. Expect to see more investors pile into Crude futures once Fed officials confirm timing for September looks fine for an initial interest rate cut.
On the upside, the July high near $84.00 is the first near-resistance level to look for. Once beyond that, a new high for June and July will be printed as Crude prices stretch higher. The Relative Strength Index (RSI) is already at 58 and will overheat quite quickly, with $87.12, the 2024 high, still within reach.
On the downside, the big belt of Simple Moving Averages (SMA) should work now as support and no longer allow any moves below it. That means the 100-day SMA at $80.32, the 55-day SMA at $79.26, and the 200-day SMA at $78.46 should avoid any dips below $78.00. Should those levels not hold, another drop back to $75 could occur.
US WTI Crude Oil: 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
AUD/USD drifts lower toward 0.6300; looks to US NFP for fresh impetus
AUD/USD heads toward 0.6300 early Friday, resuming the pullback from near 0.6400. The pair remains on a slippery slope despite a weaker US Dollar. US-China trade tensions and increased odds of Trump's tariffs-led global recession undermine the risk-sensitive Aussie. All eyes on US NFP and Powell.
USD/JPY holds recovery near 146.00; upside seems limited ahead of US NFP
USD/JPY trades close to 146.00, holding its recovery in the Asian session on Friday. Investors dial down bets of aggressive BoJ rate hikes, amid worries that Trump's new tariffs could negatively impact Japan's economy, helps the pair sustain its latest upswing. But buyers remain wary ahead of US NFP and Powell.
Gold: Will Powell and Payrolls drive the next leg higher?
Gold price is taking a breather early Friday after witnessing a volatile trading day on Thursday. Traders are consolidating the weekly gains, slightly away from the record high of $3,168, bracing for the US Nonfarm Payrolls report and US Federal Reserve Chair Jerome Powell’s speech for a fresh directional impetus.
What to expect from Bitcoin and XRP following Trump tariffs: Experts weigh in
Bitcoin stretched its decline on Thursday, briefly dropping below $83,000 as President Trump's newly announced reciprocal tariffs extended the crypto market downturn by over 4%. The sustained decline and high volatility highlight Bitcoin's increasing risk to macroeconomic uncertainties.
Trump’s “Liberation Day” tariffs on the way
United States (US) President Donald Trump’s self-styled “Liberation Day” has finally arrived. After four straight failures to kick off Donald Trump’s “day one” tariffs that were supposed to be implemented when President Trump assumed office 72 days ago, Trump’s team is slated to finally unveil a sweeping, lopsided package of “reciprocal” tariffs.
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.