WTI choppy either side of $53.00 after pulling back from fresh 11-month highs

  • Crude oil markets have seen unusually choppy price action over the past few hours.
  • WTI pulled back from fresh 11-month highs amid profit-taking after the CME pit open.
  • The fundamental backdrop remains conducive to further gains, however.

Crude oil markets have seen unusually choppy price action over the past few hours (compared with recent days/weeks anyway). At the 14:00GMT Chicago Mercantile Exchange (CME) pit open, which is often followed by heavy increases in trading volumes and volatility in crude oil markets, WTI dropped from around $53.50 to set fresh lows of the day in the $52.50s and has since been swinging either side of the $53.00 level. On the day, WTI trades with losses of around 30 cents or just over 0.5%.

No headline, piece of new or theme, in particular, was behind the downside at the time. Rather it appears as if there was just a sudden rush to take profits, given that crude oil markets had advanced to fresh 11-month highs already during Wednesday’s European morning session of around $53.90.

A larger than expected drop in official US EIA crude oil inventories, as well as Cushing inventories, helped to lift crude oil markets from lows at 15:30GMT. However, the positive move was short-lived given a larger than expected build in refined products.

Though crude oil markets have lost some momentum on Wednesday, bulls will still be eyeing a test of the February 2020 highs just below $54.50 over the coming days/weeks.

Fundamentals backdrop remains bullish

Despite modest downside seen on Wednesday, the fundamental backdrop remains bullish for crude oil markets. Much has already been made about how markets are expected to be undersupplied later in the given expectations for a rapid economic recovery as vaccines allow major economies to reopen combined with continued agreement to maintain output cuts amongst OPEC+, which is further helped by the Saudi Arabian’s additional 1M barrel per day voluntary in February and March. This voluntary cut has helped to ease concerns over the possibility that markets become oversupplied in the coming months as a result of tougher lockdowns across Europe, the US and now even parts of Asia (China just posted its largest jump in Covid-19 cases in five months).

Escalating tensions between the US (and its allies) versus Iran over the past few weeks have been another factor supporting crude oil markets, just on the off chance anything does kick off and disrupt the flow of crude oil around the Strait of Hormuz (one-fifth of the world’s oil passes through this thin channel of the sea just to the South of Iran). Iran has reportedly been conducting naval missile exercises in the Gulf of Oman and, as a reminder, recently seized a South Korean-flagged tanker, detaining the crew.

Tensions are likely to ease somewhat upon the arrival of the incoming Biden administration, who are more likely to follow in the deal-making footsteps of former Democrat President Barack Obama rather than the Trump administration's pressure tactics. However, the Biden administration is unlikely to take too kindly to reports that Iran is taking news steps towards possible atomic-weapon production, said the United Nations inspectors said in a confidential report seen by the Wall Street Journal.


Today last price 52.89
Today Daily Change -0.26
Today Daily Change % -0.49
Today daily open 53.15
Daily SMA20 49.15
Daily SMA50 45.81
Daily SMA100 42.84
Daily SMA200 38.91
Previous Daily High 53.29
Previous Daily Low 52.08
Previous Weekly High 52.56
Previous Weekly Low 47.26
Previous Monthly High 49.43
Previous Monthly Low 44.01
Daily Fibonacci 38.2% 52.83
Daily Fibonacci 61.8% 52.54
Daily Pivot Point S1 52.39
Daily Pivot Point S2 51.63
Daily Pivot Point S3 51.17
Daily Pivot Point R1 53.6
Daily Pivot Point R2 54.05
Daily Pivot Point R3 54.81



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.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD hits fresh one-month low amid souring market mood

EUR/USD has been extending its falls and dips below 1.21 as US retail sales badly disappointed and the worsening mood is supporting the safe-haven dollar. Markets digest Biden's stimulus plan. US Consumer Sentiment declined to 59.2 points. 


GBP/USD retreats toward 1.36 amid fresh dollar strength

GBP/US has pared its gains and falls toward 1.36 as the dollar gains ground. The UK economy shrank by 2.6% in November, better than estimated. The UK is ramping up its vaccination campaign and PM Johnson is pressured to ease the lockdown. 


Gold extends sideways grind near $1,850

The XAU/USD pair registered small daily gains on Thursday but struggled to extend its recovery amid a lack of significant fundamental drivers on Friday. As of writing, the pair was up 0.15% on a daily basis at $1,849.

Gold news

Forex Today: Markets “sell the fact” on Biden's stimulus, dollar rises, retail sales eyed

Markets are on the back foot after Biden hinted about tax hikes while introducing stimulus. The safe-haven dollar is edging higher despite Powell's pledge to keep monetary policy accommodative. 

Read more

DXY breaks above key downtrend, eyes move above 91.00

USD has been strongly supported on what has shaped up to be a very much risk off final trading day of the week. Most G10/USD pairs have seen significant weakness, aside from CHF/USD and JPY/USD, given that the two currencies are also considered “safe havens”.

US Dollar Index News