WTI rebounds to near $78 ahead of crucial US inflation readings

WTI rises to $78 as uncertainty deepens over a truce between Israel and Palestine.
The outlook for oil demand remains weak as the Fed maintains a hawkish stance.
Uncertainty deepens over oil demand as the US EIA reported higher oil inventories for the week ending February 23.

Sagar Dua FXStreet

West Texas Intermediate (WTI), futures on NYMEX, is up 0.28% in Thursday’s European session after a strong recovery from $77.60 ahead of key United States Personal Consumption Expenditure Price Index (PCE) for January, which will be published at 13:30 GMT.

The monthly inflation data is forecast to rise 0.4% in January, at a higher pace than the 0.2% increase in December. January Core PCE is also projected to grow at an annual pace of 2.8% versus. 2.9% in December. Federal policymakers track the underlying inflation for policy decision-making as base effects don’t distort it.

Meanwhile, investors are worried about the near-term demand for oil due to the risks of interest rates remaining restrictive for extended periods. Fed policymakers see no rush to rate cuts as they need to observe more data to confirm that inflation will return to the desired rate of 2%. The oil demand typically reduces in a high interest-rate environment.

Downside risks to oil demand escalated after the US Energy Information Administration (EIA) reported on Wednesday that crude oil stockpiles rose by 4.199M against expectations of 2.743M in the week ending February 23.

Meanwhile, the downside in the oil price remains well-supported as uncertainty deepens over a ceasefire between Israel and Palestine-backed Hamas. On Wednesday, Hamas said that it fired a volley of rockets toward northern Israel, which has downplayed expectations of a ceasefire. However, US President Joe Biden is confident there will be a truce by March 4.

WTI US OIL

Overview
Today last price	78.26
Today Daily Change	0.15
Today Daily Change %	0.19
Today daily open	78.11

Trends
Daily SMA20	76.4
Daily SMA50	74.76
Daily SMA100	76.38
Daily SMA200	77.67

Levels
Previous Daily High	79.27
Previous Daily Low	77.52
Previous Weekly High	78.74
Previous Weekly Low	76.22
Previous Monthly High	79.19
Previous Monthly Low	69.41
Daily Fibonacci 38.2%	78.19
Daily Fibonacci 61.8%	78.61
Daily Pivot Point S1	77.33
Daily Pivot Point S2	76.55
Daily Pivot Point S3	75.58
Daily Pivot Point R1	79.08
Daily Pivot Point R2	80.05
Daily Pivot Point R3	80.83

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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