|

WTI consolidates Fed, EIA stockpile-led rebound above $71.00 amid mixed mood

  • WTI bulls take a breather following the heaviest daily jump in a week.
  • Market sentiment dwindles as post-Fed reaction awaits ECB, PMIs.
  • EIA stockpiles dropped double the expectations, Omicron concerns test the bulls.

WTI eases to $71.30, down 0.07% intraday while paring the biggest daily gain of the week during early Thursday.

The black gold’s latest pullback could be linked to the market’s cautious sentiment and mixed concerns ahead of the key central bank meetings and PMI release. That said, the previous day’s rebound could well be linked to the hawkish weekly inventory data from the US Energy Information Administration (EIA) and upbeat reaction to the Federal Reserve’s (Fed) faster tapering and higher dot-plot.

Worsening virus conditions in Europe and the UK join the extension of the cold war between the US and China to weigh on the oil prices of late. It’s worth noting that the US push for Uyghur Bill and Beijing’s rush to control data firms are the latest catalysts portraying the Sino-American tussle.

Cautious sentiment ahead of the European Central Bank (ECB) and the Bank of England (BOE) meeting, as well as the preliminary PMI for December, also weigh on the oil prices.

While portraying the mood, the US stock futures struggle for clear direction while the US 10-year Treasury yields seesaw after a two-day uptrend.

On Wednesday, the weekly prints of the EIA Crude Oil Stocks Change dropped more than double the -2.082M forecast to -4.584M for the period ended on December 10.

Talking about the Fed, the US central bank matched wide market forecasts of faster tapering and signals of the rate hike in 2022. However, the oil traders took it as a positive sign considering Fed Chair Jerome Powell’s comments like “the Omicron variant poses risks to the outlook”, as well as refrain from rate hikes until the tapering is completed.

Looking forward, WTI traders should pay attention to the risk catalysts for short-term direction.

Technical analysis

Unless providing a decisive break of either the 200-SMA level of $70.22 or the 100-SMA surrounding $73.75, WTI prices are likely to remain sidelined.

Additional important levels

Overview
Today last price71.29
Today Daily Change-0.07
Today Daily Change %-0.10%
Today daily open71.36
 
Trends
Daily SMA2071.74
Daily SMA5077.36
Daily SMA10073.74
Daily SMA20070.19
 
Levels
Previous Daily High71.45
Previous Daily Low69.21
Previous Weekly High73.17
Previous Weekly Low66.17
Previous Monthly High83.97
Previous Monthly Low64.32
Daily Fibonacci 38.2%70.6
Daily Fibonacci 61.8%70.07
Daily Pivot Point S169.89
Daily Pivot Point S268.43
Daily Pivot Point S367.65
Daily Pivot Point R172.14
Daily Pivot Point R272.92
Daily Pivot Point R374.38

Author

Anil Panchal

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

More from Anil Panchal
Share:

Editor's Picks

GBP/USD bounces off lows, back above 1.3200

After bottoming out near 1.3160, GBP/USD manages to regain a bit of shine and reclaim the 1.3200 mark and beyond at the end of the week. Stronger-than-expected UK Retail Sales data seem to be helping the British Pound limit its losses, while the chaotic UK political environment keeps the bulls at bay for now.

EUR/USD looks consolidative around 1.1460

EUR/USD stages a modest rebound after slipping to a three-month low below 1.1420 at the end of the week. That said, the pair now looks to consolidate humble gains just above 1.1460 despite growing uncertainty surrounding the next round of US-Iran negotiations, which keeps the US Dollar’s downside contained.

Gold slips back to six-day lows, targets $4,100

Gold retreats for the third consecutive day on Friday, eroding gains seen in the first half of the week and approaching the key $4,100 mark per troy ounce. Indeed, the precious metal continues to face headwinds from the Fed's hawkish stance and renewed uncertainty surrounding the next round of US-Iran negotiations.

Breaking: Iran closes the Strait of Hormuz amid ceasefire deal violation
Iran says it is closing the Strait of Hormuz after accusing the United States (US) and Israel of violating the ceasefire. According to Iran, the decision came over the continued Israeli strikes in Lebanon. The Iranian Revolutionary Guard Corps Navy issued a warning to all vessels: "Do not approach the Strait of Hormuz; otherwise, your security will be jeopardized."
The Iran war didn't break the US economy, but what happens next?

Nearly four months after the start of the Iran war, the US economy remains remarkably resilient. While the conflict initially triggered a severe disruption to global energy markets and a sharp rise in Oil prices, recent diplomatic progress between Washington and Tehran has eased concerns about a prolonged supply shock.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.