|

WTI gains momentum amid output cuts and fears of global economic slowdown; eyes set on $84.00

  • US crude oil benchmark, WTI, rises for the third consecutive day, trading at $83.48, up by 0.80%.
  • Oil demand is predicted to grow by 2.25 million bpd in 2024, down from 2024’s 2.44 million bpd, according to OPEC+.
  • Weakness in China’s economy could dent oil demand.

Western Texas Intermediate (WTI), the US crude oil benchmark advances for the third day in the week, trims some of its Thursday’s losses, as it tracks an upslope support trendline since mid-July. At the time of writing, WTI is exchanging hands at $83.48, above its opening price by 0.80%.

OPEC+ output reductions and weakening US dollar support crude’s upward trajectory, despite potential demand concerns from China

Oil prices rose on several factors weighing on the market, like Saudi Arabia and Russia’s 1.3 million of crude oil output cuts, while the International Energy Agency (IEA) stated supply cuts by the Organization of Petroleum Exporting Countries and its allies (OPEC+), could drive prices higher before economic headwinds dent global demand growth.

In the meantime, OPEC+ noted that Oil’s demand would increase by 2.25 million bpd in 2024, below this year’s 2.44 million bpd.

Meanwhile, the United States (US) inflation figures on the consumer side witnessed a dip, which weakened the greenback, and underpinned WTI’s towards its new year-to-date (YTD) high above $84.00 per barrel. Nevertheless, Friday’s US PPI data bolstered the US Dollar (USD) as shown by the US Dollar Index (DXY), gaining 0.24% at 102.870, while WTI’s prices drifted lower.

Mixed economic data from China would keep WII’s gains capped on fears the country has been hit by deflation, suggesting the Covid-19 recovery would remain losing steam, weighing on oil demand,

WTI Price Analysis: Technical outlook

WTI Daily chart

WTI’s daily chart portrays the pair as upward biased, thought at the brisk of a support trendline break, which could see WTI’s diving towards the 20-day Exponential Moving Average (EMA) at $80.18, followed by the $80.00 figure. On the upside, WTI’s first supply zone to test would be the $84.00, ahead of challenging the $85.00 a barrel.

WTI US OIL

Overview
Today last price82.94
Today Daily Change0.51
Today Daily Change %0.62
Today daily open82.43
 
Trends
Daily SMA2079.36
Daily SMA5074.51
Daily SMA10074.62
Daily SMA20076.33
 
Levels
Previous Daily High84.32
Previous Daily Low82.19
Previous Weekly High82.88
Previous Weekly Low78.49
Previous Monthly High81.78
Previous Monthly Low69.77
Daily Fibonacci 38.2%83.01
Daily Fibonacci 61.8%83.51
Daily Pivot Point S181.64
Daily Pivot Point S280.86
Daily Pivot Point S379.52
Daily Pivot Point R183.77
Daily Pivot Point R285.11
Daily Pivot Point R385.9

Author

Christian Borjon Valencia

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

More from Christian Borjon Valencia
Share:

Editor's Picks

GBP/USD trims gains, back to around 1.3500

GBP/USD now surrenders part of the earlier move to multi-week peaks around 1.3530 and comes close to the 1.3500 support on Monday. Cable’s uptick comes in tandem with decent gains in the Greenback, always amid persistent uncertainty lingering over the reopening of the Strait of Hormuz and US-Iran talks.

EUR/USD deflates to 1.1540

EUR/USD begins the week on the back foot, retesting the 1.1540 zone as the NA session draws to a close. The better tone in the US Dollar weighs on the risk complex, sparking the daily correction in spot, always on the back of unabated effervescence in the Middle East.

Gold clings to daily gains; focus is back to $4,400

Gold picks up pace and advances past the $4,350 mark per troy ounce, adding to Friday’s gains. That said, the yellow metal keeps pushing harder despite the better tone in the US Dollar, and is closely following the Fed’s interest-rate outlook as well as developments in the Middle East

Bitcoin vs Gold Overview: XAU tests breakout, BTC slides as Trump claims Iran negotiations
The cryptocurrency market shows signs of trimming gains accrued last week as Bitcoin (BTC) slides below $65,000 at the time of writing on Monday. Meanwhile, Gold (XAU/USD) maintains a bullish outlook, hovering above $4,350.
US Payrolls miss – RBA on deck tomorrow
It would be remiss of me not to kick off this morning’s report with a rundown of last Friday’s US jobs report, which was a belter. Headline payrolls fell by 23,000, versus expectations of an 80,000 gain. The BLS noted that May was revised down by 66,000 (from 129,000) and June by 37,000 (from 57,000), resulting in combined May-June revisions of 103,000 lower than previous reports.
9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?
The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.