WTI Crude Oil (US Oil) Analysis
Key Points: -
- In the early morning of the European session, WTI crude oil remains steady, hovering around the $74.40 level.
- The price of oil is being lifted by supply disruptions in Libya and Nigeria, along with production cuts implemented by Saudi Arabia and Russia.
- Concerns about a potential economic slowdown in China could negatively impact the oil price.
- Market participants will closely monitor unexpected supply disruptions as well as upcoming US data for guidance in the oil market.
Today's Scenario: -
WTI crude oil, the benchmark for US oil, is currently trading around $74.40 on Monday. Investors will closely monitor any unexpected disruptions in Libya and Nigeria, as well as updates on OPEC's ongoing production cuts. The slight correction observed in WTI prices today appears to be a result of profit-taking by oil traders following three consecutive weeks of gains.
Last week, the increase in oil prices was supported by subdued US inflation, which led market participants to anticipate a less aggressive monetary policy tightening by the Federal Reserve after an expected interest rate hike in the upcoming meeting on July 26. Furthermore, the International Energy Agency (IEA) has projected that oil demand will reach a new high this year, despite broader economic challenges.
However, supply disruptions in key oil-producing countries like Libya and Nigeria are contributing to price increases, in addition to the sustained output cuts implemented by major exporters such as Saudi Arabia and Russia.
Conversely, concerns about an economic slowdown in China could have a negative impact on oil prices, considering that China is the world's second-largest consumer of oil. Notably, China's second-quarter GDP fell short of expectations, with a growth rate of 6.3%.
Later this week, market participants will closely watch the release of the Empire State Manufacturing Index and Retail Sales MoM data for June. These indicators will play a crucial role in shaping the near-term dynamics of the US Dollar and provide insights into the future direction of WTI prices.
Diagram of WTI Crude Oil (US Oil): -
Economic Events: -
Buy Scenario: -
if the price begins to rise, it may encounter resistance at 82.86, which is identified as an overlap resistance level. Additionally, there is an intermediate resistance level at 77.18, marked as a swing high resistance and corresponding to the 61.80% Fibonacci retracement level. These resistance levels could act as substantial barriers for upward price movement, potentially prompting selling activity in response. Till we do not advise to buy in WTI US oil.
Selling Scenario: -
The WTI chart indicates a bearish momentum, suggesting that the price may continue its downward trend towards the first support level.
The first support level is positioned at 73.60, characterized as a pullback support and coinciding with the 38.20% Fibonacci retracement level. Should the price fail to hold above this level, it could extend its decline towards the second support level at 67.15, which represents a significant support zone based on previous swing lows. These support levels are crucial areas where buying interest could potentially outweigh selling pressure, possibly leading to a price reversal. Till we did not advise to sell WTI Crude oil.
Support and Resistance Level: -
S1 74.44 - R1 76.49
S2 73.73 - R2 77.83
S3 72.38 - R3 78.55