Published on Jun 14, 2023

Daily Analysis For WTI Crude (US Oil) 14-06-2023

WTI Crude Oil (US Oil) Analysis

Key Points: -

· The price of WTI crude oil has surged beyond the $70.00 mark, driven by the prevailing optimism surrounding the Federal Reserve's neutral monetary policy stance.

· According to the latest report published by the International Energy Agency (IEA), global demand for oil is projected to experience robust growth of 2.4 million barrels per day (bpd) this year, reaching a record high of 102.3 million bpd.

· Market attention will be focused on the upcoming oil inventory data released by the United States Energy Information Administration (EIA) for the week ending June 09.

Today's Scenario: -

West Texas Intermediate (WTI) futures on the New York Mercantile Exchange (NYMEX) are currently testing levels above the significant resistance of $70.00 during the London session. The price of oil has received a boost as investors are hopeful that the Federal Reserve (Fed) will refrain from tightening its monetary policy. The Fed's decision will be announced at 18:00 GMT.

The US Dollar Index (DXY) has entered a bearish phase and is consistently hitting new intraday lows. At the time of writing, the DXY has reached a low of 103.16. The downward bias for the USD Index is gaining momentum as a neutral policy stance from the Fed would reduce the divergence in policies between the US and other central banks.

While the oil price is benefiting from expectations of a neutral policy stance, which would alleviate concerns of a potential recession in the United States, the prolonged contraction in US factory activity over the past seven months has dampened oil demand. However, if Fed Chair Jerome Powell announces a neutral policy stance, it would instill confidence and optimism among oil producers and market participants.

It is important for investors to consider that a hawkish guidance from the Fed cannot be completely ruled out, given that inflationary pressures are still below the desired rate of 2%.

Later this week, the European Central Bank (ECB) is set to announce its interest rate decision. ECB President Christine Lagarde is expected to further increase interest rates as the Eurozone economy is facing significant pressure from high inflation. Additional interest rate hikes by the ECB could negatively impact market sentiment.

Furthermore, the latest oil market report from the International Energy Agency (IEA) highlights that global oil demand is projected to grow by 2.4 million barrels per day (bpd) this year, reaching a record high of 102.3 million bpd. Between 2022 and 2028, global oil demand is expected to increase by 6% to reach 105.7 million bpd.

In addition to the Fed policy announcement, investors will closely monitor the weekly oil inventories data to be released by the US Energy Information Administration (EIA) for the week ending June 09.

Diagram of WTI Crude Oil (US Oil): -

Economic Events: -

Date Event Impact Currency

02:00 (United States) API Crude Oil Stock Change Medium USD

04:15 (New Zealand) Current Account Medium NZD

05:30 (New Zealand) Food Inflation YoY Low NZD

10:00 (Netherlands) Balance of Trade Low EUR

10:30 (Finland) Inflation Rate YoY Low EUR

10:30 (Finland) Inflation Rate MoM Low EUR

10:30 (Finland) CPI Low EUR

11:30 (United Kingdom) GDP 3-Month Avg Medium GBP

11:30 (United Kingdom) Goods Trade Balance Non-EU High GBP

11:30 (United Kingdom) Balance of Trade Low GBP

11:30 (United Kingdom) Construction Output YoY Low GBP

11:30 (United Kingdom) Industrial Production YoY Low GBP

11:30 (United Kingdom) Industrial Production MoM Medium GBP

11:30 (United Kingdom) Manufacturing Production YoY Low GBP

11:30 (United Kingdom) Manufacturing Production MoM Medium GBP

11:30 (United Kingdom) Goods Trade Balance High GBP

11:30 (United Kingdom) GDP YoY Low GBP

11:30 (United Kingdom) GDP MoM High GBP

11:30 (Germany) Wholesale Prices MoM Medium EUR

11:30 (Germany) Wholesale Prices YoY Medium EUR

12:30 (China) FDI (YTD) YoY Medium CNY

12:30 (Slovakia) Inflation Rate MoM Low EUR

12:30 (Slovakia) Inflation Rate YoY Low EUR

12:30 (Slovakia) Core Inflation Rate MoM Low EUR

12:30 (Slovakia) Core Inflation Rate YoY Low EUR

12:30 (Slovakia) CPI Low EUR

13:30 (France) IEA Oil Market Report Medium EUR

14:30 (Euro Area) Industrial Production MoM Medium EUR

14:30 (Euro Area) Industrial Production YoY Low EUR

14:30 (Montenegro) GDP Growth Rate YoY Low EUR

15:00 (Germany) 10-Year Bund Auction Medium EUR

15:30 (Portugal) Inflation Rate MoM Low EUR

15:30 (Portugal) Inflation Rate YoY Low EUR

15:30 (Portugal) CPI Low EUR

15:30 (Ireland) Residential Property Prices YoY Low EUR

15:30 (Ireland) Residential Property Prices MoM Low EUR

16:30 (United States) MBA 30-Year Mortgage Rate Medium USD

16:30 (United States) MBA Mortgage Applications Low USD

16:30 (United States) MBA Mortgage Refinance Index Low USD

16:30 (United States) MBA Mortgage Market Index Low USD

16:30 (United States) MBA Purchase Index Low USD

17:00 (United Kingdom) NIESR Monthly GDP Tracker Low GBP

18:00 (Canada) New Motor Vehicle Sales Low CAD

18:00 (United States) Core PPI MoM Medium USD

18:00 (United States) Core PPI YoY Low USD

18:00 (United States) PPI YoY Low USD

18:00 (United States) PPI MoM High USD

20:00 (United States) EIA Heating Oil Stocks Change Low USD

20:00 (United States) EIA Refinery Crude Runs Change Low USD

20:00 (United States) EIA Crude Oil Stocks Change Medium USD

20:00 (United States) EIA Distillate Stocks Change Low USD

20:00 (United States) EIA Gasoline Production Change Low USD

20:00 (United States) EIA Crude Oil Imports Change Low USD

20:00 (United States) EIA Gasoline Stocks Change Medium USD

20:00 (United States) EIA Cushing Crude Oil Stocks Change Low USD

20:00 (United States) EIA Distillate Fuel Production Change Low USD

21:00 (United States) 17-Week Bill Auction Low USD

23:30 (United States) Fed Interest Rate Decision High USD

23:30 (United States) FOMC Economic Projections High USD

23:30 (United States) Interest Rate Projection - 1st Yr Medium USD

23:30 (United States) Interest Rate Projection - 2nd Yr Medium USD

23:30 (United States) Interest Rate Projection - Current Medium USD

23:30 (United States) Interest Rate Projection - Longer Medium USD

Buy Scenario: -

WTI Oil is currently experiencing an upward trend on Wednesday and is approaching the key level of 68.91 (PIVOT).

If the price manages to reclaim the level of 68.91, it would help stabilize the market following a significant decline earlier in the week. In such a scenario, if the upward momentum continues to build, we can anticipate a potential surge towards the near-term target of 73.15. Till we do not advise to buy in WTI US oil.

Selling Scenario: -

On the other hand, if the price fails to surpass the 68.91 level, it would indicate that sellers still hold control. This could potentially trigger a downward momentum, leading to further selling pressure and potentially driving the price towards the next major target at 65.20. Till we did not advise to sell WTI Crude oil.