Daily Analysis For WTI Crude (US Oil) 26-05-2023

Daily Analysis For WTI Crude (US Oil) 26-05-2023

WTI Crude Oil (US Oil) Analysis
Key Points
• WTI crude oil is currently in a consolidation phase after experiencing its largest daily decline in three weeks.
• Energy traders are facing mixed sentiment regarding the US debt ceiling deal, as well as concerns related to oil demand and supply.
• The cautious mood among traders is also contributing to the limited immediate movements in WTI crude oil.
• Market participants are closely watching upcoming US data releases and the OPEC+ meeting for guidance on future price directions. Additionally, updates on the US debt ceiling situation are considered crucial for the oil market.
Today's Scenario: - WTI crude oil is currently experiencing slight gains around $72.00 per barrel as it recovers from its largest daily loss in three weeks. The market is grappling with the challenge of reconciling a retreat in the US Dollar with mixed sentiment. Concerns about the demand-supply dynamics of WTI crude oil are also weighing on traders.
Market sentiment has been dampened by the lack of progress among US policymakers in reaching a deal on the US debt ceiling extension. Reports suggest that there is still a $70.0 billion gap to be filled by negotiators in order to reach an agreement. US House Speaker Kevin McCarthy recently acknowledged the difficulty of the negotiations but expressed a commitment to continue working towards a resolution.
The Federal Reserve's cautious tone, despite positive US economic data, has bolstered the US Dollar, putting some pressure on oil sellers who have taken a momentary pause.
In other news, Russian Deputy Prime Minister Alexander Novak stated that he does not expect new steps to be taken at the upcoming OPEC+ meeting on June 4th. Novak also expressed his view that Brent crude oil prices could rise above $80 per barrel by the end of the year, reaching at least $77.
Against this backdrop, US stock futures are showing modest losses, while the US Dollar Index retreats from a two-month high and yields hover near their highest levels since March. This mixed sentiment presents a challenge for the oil price.
Looking ahead, key data releases such as the US Durable Goods Orders for April and the Core Personal Consumption Expenditure (PCE) Price Index will be closely watched by intraday traders. However, significant attention will also be given to next week's OPEC+ meeting and updates on the US debt ceiling situation.
Diagram of WTI Crude Oil (US Oil)
WTI Crude Oil
Economic Events: -
GMTEventImpactCurrency
00:30(Japan) Tokyo Core CPI YoYLowJPY
00:30(Japan) Tokyo CPI YoYLowJPY
00:30(Japan) Tokyo CPI Ex Food and Energy YoYLowJPY
02:30(Australia) Retail Sales MoMHighAUD
04:35(Japan) 3-Month Bill AuctionLowJPY
06:00(Japan) Leading Economic IndexLowJPY
06:00(Japan) Coincident IndexLowJPY
07:00(Lithuania) Retail Sales MoMLowEUR
07:00(Lithuania) Retail Sales YoYLowEUR
07:00(United Kingdom) Retail Sales ex Fuel MoMHighGBP
07:00(United Kingdom) Retail Sales ex Fuel YoYHighGBP
07:00(United Kingdom) Retail Sales YoYHighGBP
07:00(United Kingdom) Retail Sales MoMHighGBP
07:30(Switzerland) Non Farm PayrollsLowCHF
07:45(France) Consumer ConfidenceMediumEUR
08:15(Euro Area) ECB Enria SpeechLowEUR
08:40(Euro Area) ECB Lane SpeechMediumEUR
09:00(Italy) Consumer ConfidenceMediumEUR
09:00(Italy) Business ConfidenceMediumEUR
09:00(Austria) Bank Austria Manufacturing PMIHighEUR
10:10(Italy) 6-Month BOT AuctionLowEUR
11:00(France) Jobseekers TotalLowEUR
11:00(France) Unemployment Benefit ClaimsMediumEUR
11:00(Luxembourg) Balance of TradeLowEUR
13:30(Canada) Wholesale Sales MoMLowCAD
13:30(United States) Goods Trade BalanceHighUSD
13:30(United States) Wholesale Inventories MoMMediumUSD
13:30(United States) Core PCE Price Index MoMHighUSD
13:30(United States) Core PCE Price Index YoYLowUSD
13:30(United States) PCE Price Index MoMMediumUSD
13:30(United States) PCE Price Index YoYMediumUSD
13:30(United States) Personal Spending MoMHighUSD
13:30(United States) Personal Income MoMHighUSD
13:30(United States) Retail Inventories Ex Autos MoMMediumUSD
13:30(United States) Durable Goods Orders Ex Transp MoMHighUSD
13:30(United States) Non Defense Goods Orders Ex AirLowUSD
13:30(United States) Durable Goods Orders MoMHighUSD
13:30(United States) Durable Goods Orders ex Defense MoMHighUSD
15:00(United States) Michigan Consumer ExpectationsLowUSD
15:00(United States) Michigan Current ConditionsLowUSD
15:00(United States) Michigan 5 Year Inflation ExpectationsLowUSD
15:00(United States) Michigan Consumer SentimentHighUSD
15:00(United States) Michigan Inflation ExpectationsLowUSD
16:00(Canada) Budget BalanceLowCAD
18:00(United States) Baker Hughes Oil Rig CountLowUSD
18:00(United States) Baker Hughes Total Rig CountLowUSD
Buy Scenario: - A strong recovery above the 50% Fibonacci retracement at $73.94 could drive the price towards the 61.8% Fibonacci retracement at $76.16. Further upside momentum above that level would expose the oil price to the high on April 26 at $77.86. Till we do not advise to buy in WTI US oil.
Selling Scenario: - The oil price experienced a significant decline after failing to sustain its position above the 50% Fibonacci retracement level ($73.94) on a four-hour chart. The 200-period Exponential Moving Average (EMA) at $73.72 also acted as a resistance for buyers.
Currently, the oil price is at a critical level near an upward-sloping trendline drawn from the low on May 4 at $67.47. If the Relative Strength Index (RSI) (14) slips into the bearish range of 20.00-40.00, it will signal downside momentum.
Looking ahead, if the oil price drops below the low on May 25 at $71.03, it will exert significant downward pressure and potentially target the crucial support level at $70.00, followed by the 23.6% Fibonacci retracement at $68.88. Till we did not advise to sell WTI Crude oil.
Support and Resistance Level: -
SupportResistance
S1 70.45-R1 73.79
S2 69.08-R2 75.74
S3 67.12-R3 77.12

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