WTI US crude oil slips below $90, taking a breather after hawkish Fed
- WTI testing into $89.00 as markets take a step back after the Fed gave their latest rate call.
- Fed kept rates at 5.5%, but updated their rate outlook.
- US Oil easing back after supply constraint worries sent crude roaring.
West Texas Intermediary (WTI) has rallied recently, closing in the green for ten of the past twelve consecutive trading weeks and notching in over a 30% gain on the period.
Global crude oil supplies are facing down a continuous drawdown in reserve supplies after Saudi Arabia and Russia both announced that they would be extending their ongoing crude production cuts through the end of the year.
Crude soars on supply constraint fears, but hawkish Fed knocks action lower
Market analysts expect global crude supply chains to be facing a 2 million bpd deficit for the time being, until other crude production and shale pumping projects can get started in the US.
The Federal Reserve (Fed) held their benchmark interest rate at 5.5%, in-line with broader market estimates. However, the US central bank has updated their rate expectancy schedule looking forward, driving asset prices down and sending the US Dollar broadly higher.
The Fed now sees the interest rate for the year ending 2024 at 5.1%, half a percentage point higher than the previous 4.6%.
WTI technical outlook
WTI US crude oil is down %2 on the day's high, trading into $89.00 per barrel. Crude is slightly off its near-term high near $92.25, and further declines will be hampered by the 200-hour Simple Moving Average (SMA) currently providing support for intraday prices.
On the daily candlesticks, WTI is looking incredibly overbought with the Relative Strength Index (RSI) and Moving Average Convergence-Divergence indicators all flashing firmly in the top end, warning that a correction could be on the cards.
WTI's recent breakout from a rising triangle will see support just above $84.00, with the 34-day Exponential Moving Average (EMA) climbing the charts to provide dynamic support as well.
WTI daily chart
WTI technical levels
Author
Joshua Gibson
FXStreet
Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.
