- WTI takes offers to refresh intraday low, reverses the previous day’s bounce off the lowest levels since December 2021.
- US Dollar Index licks its wounds near five-week low, traces rebound in yields.
- Market players remain cautious amid banking sector fallout, hawkish Fed bets.
- Receding optimism surrounding China, cautious mood ahead of API inventories favor Oil bears.
WTI crude oil renews its intraday low near $67.30 while reversing the previous day’s corrective bounce off a 27-month low during early Tuesday. In doing so, the black gold takes clues from the US Dollar’s rebound, as well as a corrective bounce in the US Treasury bond yields.
That said, the US Dollar Index (DXY) prints the first daily gains around 103.35 as the greenback bears lick their wounds after a three-day losing streak. That said, Treasury bond yields remain inactive as Japan’s holidays limited bond trading in Asia. It’s worth noting that the US 10-year and two-year Treasury bond yields bounced off the lowest levels since September 2022 the previous day.
It should be noted that the market’s failure to cheer the risk-on mood contrasts with the headlines suggesting an ongoing discussion about deposit guarantees in the US banks and challenging the WTI crude oil traders.
Also important to note is the lack of risk-positive statements from China, as well as hopes of more Oil output, due to US President Biden’s readiness for releasing the Strategic Petroleum Reserve (SPR) on need. It’s worth noting that Saudi Arabia’s support to the OPEC+ supply-cut accord and hopes for more energy demand in the years to come, as per the latest energy demand forecasts from the Organization of the Petroleum Exporting Countries and Russia, known as OPEC+, as well as the US Energy Information Administration.
Above all, recently promising hawkish Fed bets and fears of a banking crisis weigh on the WTI crude Oil prices ahead of the weekly release of industry inventories, from the American Petroleum Institute (API).
Technical analysis
Although the oversold RSI triggered WTI crude oil’s recovery from a multi-month low, the recovery remains elusive unless crossing the December 2022 low of nearly $70.30.
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