WTI steadies below $72.00 amid jittery markets, US Dollar’s retreat amid fears of US default
- WTI crude oil consolidates the biggest daily loss in three weeks.
- Mixed sentiment about US debt ceiling deal, Oil demand-supply concerns prod energy traders.
- Cautious mood ahead of the key data/events also restricts immediate WTI moves.
- US data, OPEC+ meeting eyed for directions, US debt ceiling updates are key.
WTI crude oil prints mild gains around $72.00 as it pares the previous day’s losses, the biggest in three weeks, heading into Friday’s European session. In doing so, the black gold struggles to justify a retreat in the US Dollar price amid mixed sentiment. Also troubling the Oil benchmark traders are mixed concerns about the demand-supply matrix of the WTI crude oil.
That said, the market sentiment dribbles as US policymakers’ inability to clinch a deal on the US debt ceiling extension contrasts with the chatters suggesting a $70.0 billion gap left to be filled by the negotiators to get the much-awaited deal. Recently, US House Speaker Kevin McCarthy announced no agreement on the debt deal, as well as the continuation of talks by saying, “It’s hard. But we’re working and we’re going to continue to work until we get this done.”
It’s worth noting that the unimpressive tone of the Federal Reserve (Fed) officials, despite upbeat US data, prods the US Dollar bulls ahead of another round of key statistics, also allowing the Oil sellers to take a breather.
Elsewhere, Russian Deputy Prime Minister Alexander Novak said on Thursday, “I do not see new steps at the June 4th OPEC+ meeting.” Russia’s Novak also added that he sees Brent above $80/bbl by year-end, $77 at the latest.
Against this backdrop, US stock futures print mild losses while the US Dollar Index retreat from a two-month high and the yields dribble near the highest levels since March. All of it portrays mixed sentiment and challenge the Oil price.
Looking ahead, the key data including the US Durable Goods Orders for April and the Core Personal Consumption Expenditure (PCE) Price Index for the said month, known as the Fed’s preferred inflation gauge, can direct intraday traders. However, major attention will be given to the next week’s OPEC+ meeting and US debt ceiling updates.
Technical analysis
WTI crude oil grinds higher within a two-month-old rising support line and the 50-DMA, around $71.65 and $74.60 in that order.
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.
