- WTI holds in positive territory following a dovish FOMC outcome.
- Energy Information Administration reported crude supplies dropped by 3.1 million barrels.
West Texas Intermediate crude prices recovered from lower levels ahead of the FOMC meeting overnight whereby the Energy Information Administration reported that U.S. crude supplies dropped by 3.1 million barrels for the week ended June 14, following two consecutive weeks of gains. For July delivery, WTI fell 5 cents, or 0.1%, to $53.85 a barrel on the New York Mercantile Exchange. However, spot WTI recovered some ground and ended the NY session at 54.19 and higher by 0.26% as the Dollar bleeds following a dovish outcome from the Fed as follows:
The FOMC meeting main takeaways:
- Interest rate on excess reserves unchanged at 2.35%.
- Benchmark interest rate unchanged; target range stands at 2.25-2.50%.
- Drops language saying it would be 'patient' on future policy adjustments.
- Uncertainties have increased regarding outlook for sustained economic expansion.
- 9-1 policy vote, Fed's Bullard dissented because he wanted a rate cut.
- To act as appropriate to sustain econ. expansion with a strong labour market, inflation near target.
- Economic activity is rising at a moderate rate.
- Household spending appears to have picked up but business fixed investment has been soft.
WTI climbed through the 20-HR Exponential Moving Average (EMA), supported at the 50-HR EMA and remains better bid for the month of June so far, having climbed from a low of 50.59 at the start of the month. However, the price remains around the 200 weekly EMA, balancing on a 61.8% Fibo. If the price can't sustain a bid, there are prospects for a correction to back towards the 14th Jan 50.41 low and then the 26th November lows at 49.44. However, should bulls maintain control, 54.50 guards 55.20, meeting the 20-D EMA.
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