WTI loses ground near $68.50 on oversupply concerns, focus on Fed policy

WTI price faces challenges on weak demand projection due to higher interest rates.
Crude oil prices receive pressure on oversupply concerns as the US EIA raised its forecast for the 2023 supply estimate by 300,000 bpd from the US.
Fed is expected to keep interest rate unchanged in its last policy decision of the year.

Akhtar Faruqui FXStreet

West Texas Intermediate (WTI) price extends its losses following the US inflation data for November. The WTI price bids around $68.50 per barrel during the Asian session on Wednesday. The dynamics in the Oil market are indeed multifaceted. The pressure on Crude prices, driven by the expected maintenance of the Federal Reserve's current policy stance, reflects concerns over potential economic growth slowdown due to prolonged higher rates.

The adjustment in the US Energy Information Administration's (EIA) forecast, raising the 2023 supply estimate by 300,000 barrels per day (bpd) to 12.93 million bpd, reflects an evolving outlook for oil production in the United States (US). Additionally, the decision to lower the 2024 price forecast for Brent crude by $10 a barrel suggests a recalibration of expectations for future market conditions.

The OPEC+ output cut agreement faces challenges in effectively controlling supplies, and the increased forecast for US oil supply in 2023 adds to the market dynamics. Geopolitical tensions, such as the attack on a Norwegian commercial tanker by Yemen's Houthis in protest against Israel's actions, elevate the risk of supply disruptions in the Middle East.

The energy landscape is further influenced by the COP28 climate summit in Dubai, where negotiators are awaiting a revised deal amid criticism of the previous version for its perceived weakness in not including a clear plan for phasing out fossil fuels.

The anticipation is building up as market participants eagerly await the release of the US Producer Price Index (PPI) and the Federal Reserve's Interest Rate Decision on Wednesday. The expectation for the Federal Open Market Committee (FOMC) to maintain its current policy stance in the December meeting sets the stage for keen investor interest.

All eyes will be on Federal Reserve Chair Jerome Powell's comments, as they could provide valuable insights into potential changes in interest rates for the coming year. The intersection of economic data and Fed decisions could play a significant role in shaping market sentiments and influencing trading strategies in the Crude oil market.

WTI US OIL: Technical levels to watch

Overview
Today last price	68.54
Today Daily Change	-0.39
Today Daily Change %	-0.57
Today daily open	68.93

Trends
Daily SMA20	74.3
Daily SMA50	79.25
Daily SMA100	81.87
Daily SMA200	77.68

Levels
Previous Daily High	72.18
Previous Daily Low	68.47
Previous Weekly High	75.13
Previous Weekly Low	69.01
Previous Monthly High	83.34
Previous Monthly Low	72.39
Daily Fibonacci 38.2%	69.89
Daily Fibonacci 61.8%	70.76
Daily Pivot Point S1	67.55
Daily Pivot Point S2	66.16
Daily Pivot Point S3	63.84
Daily Pivot Point R1	71.25
Daily Pivot Point R2	73.56
Daily Pivot Point R3	74.95

Author

Akhtar Faruqui

FXStreet

Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.

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