WTI stays depressed around $114.00 with eyes on Fed’s Powell, oil refiners’ meeting
- WTI picks up bids to consolidate daily losses, looks set for the consecutive second weekly loss.
- US dollar rebound, hawkish central banks test oil buyers.
- US Energy Secretary calls emergency meeting of oil refiners during the next week.
- Russia hints at further oil supplies while also confirming market’s uncertainty.
WTI crude oil price fades the previous day’s bounce off a two-week low as sellers attack $114.00 during Friday’s Asian session.
The black gold cheered mixed updates on oil markets and a softer US dollar to rebound the previous day. However, chatters surrounding the US Energy Secretary Jennifer Granholm’s meeting with the oil refiners during the next week join the US dollar’s recovery ahead of a speech from the Fed Chairman Jerome Powell to weigh on the quote of late.
That said, Russia’s readiness to increase oil production in July joins the nation’s determination to keep the oil-for-roubles scheme to keep oil buyers hopeful. Though, Russian Deputy Prime Minister Alexander Novak’s comments like, “Oil market is balanced but there are lots of uncertainties,” seem to probe the commodity prices of late.
Elsewhere, US Dollar Index (DXY) takes the bids to refresh its intraday high around 104.00 while posting the first daily gain in three. In doing so, the greenback gauge bounces off the weekly low by paring the biggest daily fall in a month, flashed the previous day.
Downbeat US Treasury yields joined softer US data to weigh on the US dollar prices and helped trigger the WTI’s rebound.
US 10-year Treasury yields dropped during the last two consecutive days, to 3.243% at the latest as the Fed’s 0.75 rate increase couldn’t impress bulls. On the other hand, US Building Permits and Housing Starts eased in May to 1.695M and 1.549M respectively while the Initial Jobless Claims 4-week average inched up to 218.5K versus 215K expected during the period ended on June 10. Further, Philadelphia Fed Manufacturing Survey printed a negative figure of -3.3 for June, the first such contraction since May 2020.
Looking forward, the US Industrial Production for May, expected at 0.4% versus 1.1% prior, will be the first to entertain traders ahead of the Fed’s Monetary Policy Report and Powell’s speech.
It’s worth noting that the oil refiners are likely to discuss capacity and pricing issues with US President Joe Biden during the next week’s meeting, which in turn can help witness volatile energy markets.
Technical analysis
A first daily closing below the 21-DMA in over a month keeps WTI crude oil sellers hopeful until the quote trades successfully beyond the immediate DMA hurdle surrounding $115.00.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
