- WTI prices are struggling into the G7 this weekend on growth fears.
- With a focus on the downside, a break of 55 and the trendline support, bears can target a drop to the 52 handle.
West Texas Intermediate crude ended down -0.91%, having travelled between a high of $56.44 and a low of $54.88bbls while WTI crude for October delivery on the New York Mercantile Exchange fell 33 cents, or 0.6%, to settle at $55.35 per barrel. The price of oil was weighed down by expectations for surplus supplies ahead of what could shape up to be an eventful weekend of headlines following the Jackson Hole and G7.
A volatile market for the foreseeable future
Essentially, traders can expect a volatile market for the foreseeable future while there are arguments for both the demand and supply side of the equation. 'The global supply narrative has continued to pump out a positive narrative, with the latest OPEC compliance data showing continued over-compliance, but demand fears continue to place a cap on the complex. This suggests that CTAs could be whipsawed for a while longer, as momentum signals prompt the algos to buy high and sell low, with prices largely remaining range-bound," analysts at TD Securities argued.
Meanwhile, energy markets shrugged off the bearish inventory report from the DOE which saw products build on net. "While increased refinery runs helped drain crude inventories, weaker apparent demand has seen the products go into storage, which could ultimately see refinery runs remain below average in the coming months if the trend continues. In addition, the majority of the inventory declines have come from Cushing as new pipelines divert flow to the Gulf Coast, but with the Brent-WTI differential narrowing, exports are less favorable, and inventories in the Gulf Coast continue to increase," the analysts at TD Securities added.
WTI levels
The price continues to hold above the 20-daily moving average but was capped by the 50-DMA, below the downside trendline. On a reemergence of the bulls, which have manage a higher high and low on Tuesday and now Wednesday as well, there will be scope for a recovery to the 58 handle to meet trend line resistance. With a focus on the downside, a break of 55 and the trendline support, bears can target a drop to the 52 handle and the 61.8% Fibo at 51.70 on the wide.
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 clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.