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WTI holds below $85.50 amid inflation fears

  • WTI drifts lower to $85.00 on Friday. 
  • The higher-for-longer US rate narrative weighs on the black gold. 
  • The fear of Middle East geopolitical tensions might cap the WTI’s downside for the time being. 

Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around $85.00 on Friday. The black gold edges lower on the day as the elevated inflation dampened the expectation for US interest rate cuts this year. Nonetheless, the escalating geopolitical tensions in the Middle East might cap the downside of WTI prices in the near term. 

The recent US inflation and employment reports indicated that the path of easing inflation remains extremely bumpy and the Federal Reserve (Fed) might need to delay the interest rate cuts. According to the FOMC minutes released on Wednesday, participants noted their uncertainty about the elevated high inflation and recent data had not increased their confidence that inflation was moving sustainably down to 2%.” Financial markets have priced in only two rate cuts this year, which will most likely start in September, per the CME FedWatch Tool. The higher-for-longer US rate narrative could exert some selling pressure on black gold as it translates to less demand for oil as the cost of storing crude increases. 

Additionally, WTI prices lose traction after the release of the EIA report. Crude oil stockpiles in the United States for the week ending April 5 increased by 5.841 million barrels from a build of 3.21 million barrels in the previous week. The market consensus estimated that stocks would rise by about 2.366 million barrels, according to the US Energy Information Administration report on Wednesday.

On the other hand, the fear of geopolitical risks in the Middle East might boost WTI prices. Israel and Hamas began a fresh round of negotiations in their more than six-month-old Gaza war this week, but those talks have yielded no agreement. Additionally, a potential Iranian strike on Israel for a suspected air strike on its embassy in Syria on April 1 is likely to cap the downside of WTI prices for the time being. 

WTI US OIL

Overview
Today last price85.26
Today Daily Change0.22
Today Daily Change %0.26
Today daily open85.04
 
Trends
Daily SMA2083.18
Daily SMA5079.48
Daily SMA10076.48
Daily SMA20079.32
 
Levels
Previous Daily High86.02
Previous Daily Low84.36
Previous Weekly High87.12
Previous Weekly Low82.26
Previous Monthly High83.05
Previous Monthly Low76.5
Daily Fibonacci 38.2%84.99
Daily Fibonacci 61.8%85.38
Daily Pivot Point S184.26
Daily Pivot Point S283.48
Daily Pivot Point S382.59
Daily Pivot Point R185.92
Daily Pivot Point R286.8
Daily Pivot Point R387.58

Author

Lallalit Srijandorn

Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.

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