|

WTI pullback on surprising US inventory build, strong USD

  • WTI trades at $87.80, down 0.33%, after US crude inventories show a 4 million barrel increase, defying expectations.
  • US inflation report reveals a 3.7% YoY rise in August, driven by a 10.6% increase in retail gasoline prices.
  • Technical outlook suggests WTI could test support at $87.23; resistance levels emerge at $88.00 and year-to-date high of $88.99.

Western Texas Intermediate (WTI), the US crude oil, trims some of its daily gains spurred by a build on US oil inventories amid expectations for a drop. This and the latest US inflation report in the United States (US) boosted the Greenback (USD), a headwind for US dollar-denominated assets. WTI is trading at $87.80, down 0.33%.

WTI retreated amid unexpected surge in US inventories, rising US Dollar

The latest US crude oil inventories showed an increase of 4 million barrels last week, crushing estimates gathered by a Reuters poll for a 1.9 million barrel contraction, in data revealed by the US Energy Information Administration (EIA). Additional data showed that fuel demand dropped as the summer driving period in the US ended in the September 4 Labor Day Holiday.

The latest inflation report in the US showed headline inflation rose by 3.7% YoY in August, above estimates propelled by a 10.6% increase in retail gasoline prices. Contrarily, excluding volatile items like food and energy, inflation slowed from 4.7% to 4.3%  YoY.

Oil prices had remained underpinned by Saudi Arabia and Russia’s voluntary oil production cut as both countries slashed 1.3 million barrels from the market.

WTI Price Analysis: Technical outlook

After rising to a 10-month high, WTI retraced below the September 12 daily close of $88.18 per barrel. A daily close below that level could pave the way for a pullback toward the top of an ascending-triangle top-trendline turned support at $87.23 before slumping to the $87.00 figure. A breach of the latter will expose the September 8 daily low of $85.65, ahead of slumping below the $85.00 figure. Conversely, WTI’s first resistance would be the $88.00 figure before cracking the YTD high of $88.99.

WTI US OIL

Overview
Today last price88.02
Today Daily Change-0.16
Today Daily Change %-0.18
Today daily open88.18
 
Trends
Daily SMA2082.71
Daily SMA5080.09
Daily SMA10075.7
Daily SMA20076.31
 
Levels
Previous Daily High88.74
Previous Daily Low86.65
Previous Weekly High87.56
Previous Weekly Low84.58
Previous Monthly High84.32
Previous Monthly Low77.53
Daily Fibonacci 38.2%87.94
Daily Fibonacci 61.8%87.45
Daily Pivot Point S186.98
Daily Pivot Point S285.77
Daily Pivot Point S384.89
Daily Pivot Point R189.06
Daily Pivot Point R289.94
Daily Pivot Point R391.15
 

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

AUD/USD turns south toward 0.6900 as USD firms up

AUD/USD sees fresh selling and drops toward 0.6900 in late Asian trading on Monday, as renewed US Dollar strength weighs on the pair amid lingering Middle East and Russia-Ukraine geopolitical tensions. Focus remains on Oil prices, Treasury bond yields, and RBA expectations for fresh trading impetus in the major.

USD/JPY retakes 158.00 amid hawkish BoJ bets, firmer USD

USD/JPY erases losses and retakes 158.00 in the Asian session on Monday, trading within a one-week-old range. Geopolitical uncertainty continues to underpin the US Dollar, despite fading Fed rate hike hopes, supporting the pair's rebound. However, further upside could be capped by hawkish BoJ expectations and looming intervention risks that could support the Japanese Yen.

Gold trades flat as stronger US Dollar offsets easing Fed rate-hike bets

Gold trades little changed on Monday after giving back most of its early gains. The metal remains caught between easing Fed interest-rate hike bets and a stronger US Dollar (USD), while US Treasury yields also remain elevated near multi-year highs.

Crypto Today: Bitcoin rally slows while Ethereum and XRP extend recovery amid slowing ETF inflows

Bitcoin is narrowly consolidating while trading above $86,000 at the time of writing on Monday. Altcoins, on the other hand, show a positive outlook, with Ethereum edging higher above $2,700 while Ripple steadies above $1.52.

Eurozone inflation just hit 3.8%, its highest in three years. This chart shows why the ECB can’t simply hike its way out

The ECB would normally have a relatively straightforward answer to inflation running almost twice its target: raise interest rates. But these are not normal circumstances. This time, the bond market is already doing part of the tightening for it, leaving the ECB facing an increasingly difficult dilemma.

Eurozone inflation just hit 3.8%, its highest in three years. This chart shows why the ECB can’t simply hike its way out

The ECB would normally have a relatively straightforward answer to inflation running almost twice its target: raise interest rates. But these are not normal circumstances. This time, the bond market is already doing part of the tightening for it, leaving the ECB facing an increasingly difficult dilemma.