- WTI recovers from Tuesday’s losses, up almost 1%.
- Surging energy prices across the UK and Europe to increase demand for oil.
- EIA reports: US stockpiles dropped by 4.58 million barrels.
Western Texas Intermediate (WTI) is climbing in the New York session, trading at $74.43, up 0.35% at the time of writing. Early during the day, crude oil slipped to daily lows around $73.56 though bounced back, trimming Tuesday’s losses.
Soaring electricity and natural gas prices across the UK and Europe benefits WTI prospects as people might switch from natural gas to oil. Additionally, power outages in China could push prices higher, as US natural gas producers struggle to fulfill worldwide demand.
On Wednesday, natural gas is losing $0.37, trading at $5.50. Despite that dip, the price is up around 14% weekly, as investors worry about supply chains increase.
US Crude oil inventories fall
Meanwhile, the US Energy Information Administration revealed that oil stockpiles in the US decreased by 4.58 million barrels in the week ending on September 24. The fall was worse than expected, bringing the inventory down to 418.5 million barrels.
On Wednesday, the Joint Technical Committee (JTC) of OPEC commented that demand for oil products for heating and power generation could increase due to the ongoing crisis in Europe and the UK.
WTI Price Forecast: Technical outlook
WTI tested October 5, 2018, high at $76.80 unsuccessfully. Despite increasing demand, crude oil retreated below $75.00, consolidating around the $74.00-50 range. A break above $75.00 could pave the way for further gains towards another test of multi-year highs.
On the flip side, failure at $75 could push WTI’s price lower. The first demand zone would be the September 28 low at $74.11, followed by $74.00.
The Relative Strength Index is at 64, slightly flat, giving oil bulls a breather, on its way towards new 2021’s yearly highs.
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