WTI drops and extends its losses below $79.00 after an increase in US oil inventories

WTI extended its losses to three consecutive days beneath $80.00 a barrel.
US EIA reported that stockpiles had risen the most since June 2021.
WTI Price Analysis: Subdued but it remains slightly tilted to the downside.

Christian Borjon Valencia FXStreet

Western Texas Intermediate (WTI), the US crude oil benchmark, is extending its fall to three straight days of consecutive losses, weighed by crude oil inventories in the United States (US) jumping more than estimates. Speculations of further interest rate hikes by the US Federal Reserve (Fed) bolstered the greenback, a headwind for oil prices. At the time of writing, WTI is trading at $78.40.

WTI is climbing above the 50-day Exponential Moving Average (EMA) even though US crude oil inventories have risen the most since June 2021. The US Energy Information Administration (EIA) agency revealed that crude stockpiles increased by 16.3 million barrels, in the week of February 10, to 471.4 million barrels.

Crude inventories in Cushing, Oklahoma, a delivery hub for futures, jumped by 659K last week, while refinery crude fell by 383K barrels per day. Gasoline inventories advanced by 2.3 million barrels to 241.9 million, exceeding analysts’ estimates of a 1.5 million barrels rise. Distillate inventories which account for diesel and heating oil, dropped by 1.3 million to 119.2 million, vs. expectations for a 400K barrel increase.

Aside from this, US Retail Sales for January smashed expectations and exceeded estimates. Therefore, recent Fed hawkish commentary, following Tuesday’s CPI print and today’s data, sparked speculation that the Federal Reserve would continue to tighten conditions, a tailwind for the greenback.

WTI Technical analysis

Albeit WTI remains neutral to downward biased, it remains consolidated in the $77.30-$80.50 range. The Relative Strength Index (RSI) in the bullish territory is almost flat, portraying oil as rangebound. In contrast, the Rate of Change (RoC) portrays sellers gaining momentum. Therefore, mixed signals suggest caution is warranted.

For WTI to resume its uptrend, it will need to conquer $80.50, which would open the door to test the 100 and 200-day EMAs, each at $81.43 and $85.00. As an alternate scenario, oil prices would resume their downtrend, with a decisive break below $77.00, dragging prices towards the YTD Low at $72.30.

WTI US OIL

Overview
Today last price	78.81
Today Daily Change	-0.56
Today Daily Change %	-0.71
Today daily open	79.37

Trends
Daily SMA20	78.82
Daily SMA50	77.61
Daily SMA100	80.91
Daily SMA200	89.86

Levels
Previous Daily High	79.82
Previous Daily Low	77.7
Previous Weekly High	80.48
Previous Weekly Low	72.5
Previous Monthly High	82.68
Previous Monthly Low	72.64
Daily Fibonacci 38.2%	78.51
Daily Fibonacci 61.8%	79.01
Daily Pivot Point S1	78.11
Daily Pivot Point S2	76.85
Daily Pivot Point S3	76
Daily Pivot Point R1	80.22
Daily Pivot Point R2	81.07
Daily Pivot Point R3	82.33

Author

Christian Borjon Valencia

FXStreet

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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