WTI remains on the defensive above $72.30 amid concern about OPEC+ cut, China’s oil demand

WTI prices trade in negative territory, losing 0.04% on the day.
Moody’s downgraded China’s sovereign credit rating from stable to negative, citing the increasing risks to growth and a property sector crisis.
Oil traders are concerned about the effectiveness of voluntary supply cuts by OPEC+.
US ADP Employment Change and EIA Crude Oil Stocks Change will be due later on Wednesday.

Lallalit Srijandorn FXStreet

Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around $72.30 on Wednesday. The concern about the effectiveness of OPEC+ supply cuts and worries about a worsening demand outlook in China exert some selling pressure on the WTI prices.

Early Wednesday, Moody’s downgraded China’s sovereign credit rating from stable to negative. The credit rating agency cites the increasing risks to growth and a property sector crisis in China. This development warns lenders that the risk of a default has increased in recent years. That being said, the pessimistic economic outlook in China might cap the WTI’s upside as China is the world's largest oil consumer.

Last week, the Organisation of Petroleum Exporting Countries and its allies, including Russia (OPEC+), agreed on voluntary supply cuts of around 2.2 million barrels per day (bpd) for the first quarter of 2024. These restrictions include a 1.3 million bpd extension of Saudi and Russian voluntary cuts. However, this development fails to boost WTI prices as investors doubt how output cutbacks will be measured.

About the data, US crude oil inventories increased by 594,000 barrels for the week ending December 1 from the previous reading of 817,000 decline, according to the American Petroleum Institute (API). The market consensus expected a 2.267M barrel draw.

Looking ahead, oil traders will monitor the US ADP Employment Change for November and EIA Crude Oil Stocks Change, due later on Wednesday. The highlight of the week will be the US Nonfarm Payrolls (NFP) data on Friday. These events could significantly impact the USD-denominated WTI price. Oil traders will take cues from the data and find trading opportunities around the WTI prices.

WTI US OIL

Overview
Today last price	72.46
Today Daily Change	-0.03
Today Daily Change %	-0.04
Today daily open	72.49

Trends
Daily SMA20	75.99
Daily SMA50	81.23
Daily SMA100	82.21
Daily SMA200	77.89

Levels
Previous Daily High	74.26
Previous Daily Low	72.35
Previous Weekly High	79.62
Previous Weekly Low	74.04
Previous Monthly High	83.34
Previous Monthly Low	72.39
Daily Fibonacci 38.2%	73.08
Daily Fibonacci 61.8%	73.53
Daily Pivot Point S1	71.81
Daily Pivot Point S2	71.13
Daily Pivot Point S3	69.91
Daily Pivot Point R1	73.72
Daily Pivot Point R2	74.94
Daily Pivot Point R3	75.62

Author

Lallalit Srijandorn

FXStreet

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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