WTI falls on Asia’s earthquake worries fading amidst a softer USD
- Oil installations around Turkey and Syria had reported no or minor damages, which capped WTI’s drop.
- Fed hawkish commentary capped WTI’s rally toward $80.00.
- WTI Price Analysis: To remain downward biased, eyeing $73.00.
WTI creeps lower after testing weekly highs around $78.80 and drops toward the $77.70 area on Thursday amid further hawkish Fed speaking pushing back against Fed Chair Powell’s comments on Tuesday. In addition, speculation of damages to oil infrastructure following an earthquake in Turkey and Syria faded, which remained intact. At the time of writing, WTI exchanges hands at $77.63 per barrel.
Worries about an earthquake that hit Turkey and Syria at the beginning of the week, which has killed more than 19,000 people, was a tailwind for US crude oil prices amidst growing concerns about damaging pipelines and oil infrastructure. Even though spurred a shut off for some days, sources cited by Reuters said “We won’t be losing that supply for as long as we thought.”
An additional factor that undermined oil prices was a stunning jobs report in the United States (US), keeping investors unease amid speculation that the US Federal Reserve would continue to tighten monetary conditions aggressively to an already slowing economy.
Meanwhile, the prospects of solid demand from China, amidst its relaxation of Covid-19 measures, backed WTI prices, as reports showed that Chinese oil consumption would increase crude output by 1 million barrels a day.
That said, WTI’s snapped three days of consecutive gains, peaking around the 50-day EMA at $78.69, exacerbating a fall to the 20-day EMA at $77.71.
WTI Technical analysis
Technically speaking, WTI prices appear to have peaked at around the 50-day EMA during the current week. Even though oil is printing a hanging man, a bearish signal, it’s also in the process of forming a bearish engulfing candle pattern, which would trigger a stronger downward reaction that could lower prices.
Therefore, WTI’s first support would be $77.00 PB. A breach of the latter and oil prices will aim toward the February 7 daily low of $74.40, ahead of the weekly low of $72.30.
Author
Christian Borjon Valencia
FXStreet
Christian Borjon began his career as a retail trader in 2010, mainly focused on technical analysis and strategies around it. He started as a swing trader, as he used to work in another industry unrelated to the financial markets.
