WTI dips to $70.60 and rebounds as geopolitical risks continue to plague Crude Oil markets

US Dollar strength is hampering Crude Oil barrel bids.
Disappointing growth figures from China depress energy markets on demand concerns.
A late-day rebound brought Crude Oil back on-balance for Wednesday.

Joshua Gibson FXStreet

Lagging growth from China, steadily increasing global Crude Oil production, and a rising US Dollar (USD) saw West Texas Intermediate (WTI) US Crude Oil fall into a fresh low for the week near $70.60.

Chinese growth figures disappointed early Wednesday, with China’s annualized Gross Domestic Product (GDP) through the fourth quarter missing expectations of 5.3%, printing at 5.2% compared to the previous quarter’s 4.9%.

With Chinese growth failing to hit market expectations, concerns are mounting that China’s demand for fossil fuels will decline looking forward, widening the gap between global demand for Crude Oil and current production rates that are already outpacing demand despite steep production cuts from the Organization for the Petroleum Exporting Countries (OPEC).

With US production continuing to increase Crude Oil production into new all-time highs, OPEC is going to have to commit to even steeper production caps moving forward, a move that will become increasingly undesirable for smaller member states within the oil cartel who are already depressing Crude Oil output as much as their government budgets can afford.

Despite downside pressures, including a rising US Dollar on Wednesday, Crude Oil markets found a leg up on ongoing geopolitical concerns with Iran-backed Houthi rebel is Yemen determined to continue attacking civilian cargo ships passing through the Red Sea en route for the Suez Canal.

Many private logistics companies have rerouted shipping lanes around the continent of Africa to connect Europe and Asia, limiting the potential for supply constraints, but energies markets remain determined to fear the possibility of Crude Oil supply being unable to make it to market amidst Red Sea tensions.

WTI Technical Outlook

WTI’s early decline on Wednesday saw a rebound back above the 200-hour Simple Moving Average (SMA) near $72.40 as US Crude Oil heads back towards the $73.00 handle.

Crude Oil’s back-and-forth on Wednesday sees WTI pushing into the middle of a long-term congestion pattern forming up on daily candlesticks with a nearly-flat 200-day SMA near $78.00 and a declining 50-day SMA pressing down on intraday price action from $74.00.

WTI Hourly Chart

WTI Daily Chart

WTI Technical Levels

WTI US OIL

Overview
Today last price	72.47
Today Daily Change	0.49
Today Daily Change %	0.68
Today daily open	71.98

Trends
Daily SMA20	72.68
Daily SMA50	73.73
Daily SMA100	79.83
Daily SMA200	77.48

Levels
Previous Daily High	73.67
Previous Daily Low	71.86
Previous Weekly High	75.28
Previous Weekly Low	70.21
Previous Monthly High	76.79
Previous Monthly Low	67.97
Daily Fibonacci 38.2%	72.55
Daily Fibonacci 61.8%	72.98
Daily Pivot Point S1	71.34
Daily Pivot Point S2	70.69
Daily Pivot Point S3	69.52
Daily Pivot Point R1	73.15
Daily Pivot Point R2	74.32
Daily Pivot Point R3	74.96

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

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