WTI crude price fell 2.4% on Friday and is heading for an almost 5% weekly drop as recent solid US economic data reinforced views that the Fed would keep interest rates higher for longer. This in turn weighs on risky assets. EURUSD pair fell below major support at 1.0630, while European indices pulled back sharply from recent record highs.
While inflation does appear to be easing, there are fears that the path lower will not be smooth and inflation may not be cooling fast enough for the Fed’s liking. At the same time robust US economic data fanned concerns that the US central bank will raise interest rate hikes that could weigh on oil demand at a time when inventories continue to rise. The latest EIA report showed that US crude inventories increased by 16.283 million barrels to 842.973 million last week, the highest level since early October. At the same time, prices have also been under pressure after the US government announced plans to release 26 million barrels of oil from strategic reserves. IEA and OPEC raised their forecast for 2023 oil demand growth, citing higher consumption from China, however this did not provide more help for oil bulls.
Start investing today or test a free demo
Open account Try demo Download mobile app Download mobile app
OIL.WTI - during the Asian session price broke below major support at $77.80, which is marked with previous price reactions. Currently price is approaching crucial support at $76.10, which coincides with 78.6% Fibonacci retracement of the upward wav started in December 2021 and lower limit of local descending channel. Should break lower occur, downward move may deepen towards recent lows at $72.50. Source: xStation5
This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.
