WTI consolidates gains above the $78.70 mark amid the hope of a China stimulus plan


  • WTI consolidates its recent gains around the $78.80 mark.
  • Supply cuts from Saudi Arabia and Russia, hopes for Chinese stimulus measures lift WTI prices.
  • Further rate hikes, the economic slowdown in the Eurozone might cap the upside for WTI.
  • Oil traders will watch the Federal Open Market Committee (FOMC) meeting on Wednesday.

Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around the $78.80 mark so far this Tuesday. WTI consolidates its recent gains after hitting the highest level since April 24, backed by signs of a tighter oil market, data, and the hope for China’s stimulus plan. 

Several factors have contributed to WTI's recent gains. WTI has edged higher for four consecutive weeks, with supplies projected to tighten due to curbs by the Organisation of Petroleum Exporting Countries (OPEC) and allies such as Russia, known as OPEC+.

About the data, Baker Hughes reported that the number of oil rigs in the United States fell by seven last week, the most since the beginning of June. The current number of active oil rigs in the United States fell to 530, the lowest since March 2022. The Baker Hughes rig count data exacerbates supply-side worries and contributes to crude oil price increases.

Additionally, China, the world’s second-largest oil consumer, signaled additional support for the real estate sector and a series of measures to stimulate domestic consumption amid a sluggish post-COVID recovery. This, in turn, supports further upside in the WTI price.

On the other hand, the upside for WTI might be limited as market participants await the Federal Reserve's (Fed) monetary policy decision on Wednesday. It is widely anticipated that the Fed will raise interest rates by a quarter percentage point to 5.25–5.50%. It’s worth noting that higher interest rates raise borrowing costs, which can slow the economy and diminish oil demand. 

On the Euro front, the Eurozone manufacturing sector's woes worsened in July. The Eurozone Manufacturing Purchasing Managers Index (PMI) decreased to 42.7, below market expectations of 43.5 and June's reading of 43.4. The index reached its lowest level in 38 months. The data dampens demand for WTI.

Oil traders will keep an eye on the Federal Open Market Committee (FOMC) meeting and Fed Chairman Jerome Powell's press conference. This event could significantly impact the USD-denominated WTI price. Apart from this, traders will take cues from US CB Consumer Confidence, Advance GDP QoQ, and the Fed’s preferred measure of inflation, the core Personal Consumption Expenditure (PCE) Price Index MoM later this week.

 

WTI US OIL

Overview
Today last price 78.83
Today Daily Change -0.01
Today Daily Change % -0.01
Today daily open 78.84
 
Trends
Daily SMA20 73.43
Daily SMA50 72.04
Daily SMA100 73.5
Daily SMA200 76.64
 
Levels
Previous Daily High 79.19
Previous Daily Low 76.38
Previous Weekly High 77.23
Previous Weekly Low 73.78
Previous Monthly High 74.36
Previous Monthly Low 66.95
Daily Fibonacci 38.2% 78.12
Daily Fibonacci 61.8% 77.45
Daily Pivot Point S1 77.08
Daily Pivot Point S2 75.32
Daily Pivot Point S3 74.27
Daily Pivot Point R1 79.89
Daily Pivot Point R2 80.95
Daily Pivot Point R3 82.7

 

Share: Feed news

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


Recommended content

Editors’ Picks

EUR/USD recovers toward 1.0850 as risk mood improves

EUR/USD recovers toward 1.0850 as risk mood improves

EUR/USD gains traction and rises toward 1.0850 on Friday. The improvement seen in risk mood makes it difficult for the US Dollar (USD) to preserve its strength and helps the pair erase a portion of its weekly losses. 

EUR/USD News

GBP/USD stabilizes above 1.2700 after downbeat UK Retail Sales-led dip

GBP/USD stabilizes above 1.2700 after downbeat UK Retail Sales-led dip

GBP/USD staged a rebound and stabilized above 1.2700 after dropping to a weekly low below 1.2680 in the early European session in response to the disappointing UK Retail Sales data. The USD struggles to find demand on upbeat risk mood and allows the pair to hold its ground. 

GBP/USD News

Gold rebounds to $2,340 area, stays deep in red for the week

Gold rebounds to $2,340 area, stays deep in red for the week

Gold fell nearly 4% in the previous two trading days and touched its weakest level in two weeks below $2,330 on Thursday. As US Treasury bond yields stabilize on Friday, XAU/USD stages a correction toward $2,340 but remains on track to post large weekly losses.

Gold News

Dogecoin inspiration Kabosu dies, leaving legacy of $22.86 billion market cap meme coin behind

Dogecoin inspiration Kabosu dies, leaving legacy of $22.86 billion market cap meme coin behind

Kabosu, the popular Shiba Inu dog that inspired the logo of the largest meme coin by market capitalization, Dogecoin (DOGE), died early on Friday after losing her fight to leukemia and liver disease.

Read more

Week ahead – US PCE inflation and Eurozone CPI data enter the spotlight

Week ahead – US PCE inflation and Eurozone CPI data enter the spotlight

Dollar traders lock gaze on core PCE index. Eurozone CPIs in focus as June cut looms. Tokyo CPIs may complicate BoJ’s policy plans. Aussie awaits Australian CPIs and Chinese PMIs.

Read more

Forex MAJORS

Cryptocurrencies

Signatures