WTI Crude Oil (US Oil) Analysis
Key Points: -
· The EIA Crude Oil Stocks Change data suggests a decrease in demand for crude oil.
· The renewed trade war tensions between China and the United States could put pressure on WTI (West Texas Intermediate crude oil).
· Market participants are expecting a more dovish policy stance from the Federal Reserve (Fed).
Today's Scenario: -
As of Thursday, Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around the $75.40 mark. The WTI price edged lower after the release of the Crude Oil Stocks Change data, indicating lower demand for crude oil.
The Energy Information Administration (EIA) reported that the Crude Oil Stocks Change for the week ending July 14 fell by 708,000 barrels, which was below the expected drop of 2.44 million barrels and lower than the previous week's gain of 5.946 million barrels.
WTI price might also face pressure due to renewed trade war tensions between the US and China. China's Ambassador Xie Feng criticized the US's consideration of foreign investment and AI chip restrictions and threatened retaliation if the US imposes further curbs on its chip sector.
On the other hand, market participants anticipate that the Federal Reserve (Fed) is nearing the end of its policy tightening cycle and will likely maintain interest rates following the expected 25 basis points increase in the July meeting. A more dovish stance from the Fed could limit the downside for WTI. It is worth noting that higher interest rates can slow the economy and reduce oil demand.
Additionally, Russia is planning to cut its oil exports by 2.1 million metric tonnes in the third quarter, in line with its planned voluntary export cuts of 500,000 barrels per day in August.
In the coming days, oil traders will closely monitor the developments in the US-China relationship and key economic data such as Unemployment Claims and the Philadelphia Fed Manufacturing Index. Looking ahead, next week's focus will shift to the US Flash Manufacturing Purchasing Managers Index (PMI) and Flash Services PMI, which could significantly impact the USD-denominated WTI price.
Diagram of WTI Crude Oil (US Oil): -
Economic Events: -
Buy Scenario: -
if the price starts to climb, it may face resistance at 76.99, which is identified as an overlap resistance that could hinder further upward movement.
If the price continues to rise, it might encounter the 2nd resistance level at 78.77, which is another overlap resistance level and could potentially act as a barrier to further upward movement. Till we do not advise to buy in WTI US oil.
Selling Scenario: -
The WTI US Oil chart currently indicates a weak bullish momentum with low confidence. There is a possibility that the price could decline towards the 1st support level in the short term before bouncing back and rising towards the 1st resistance level.
The 1st support level at 73.76 is identified as an overlap support, and it could potentially serve as a rebound point for the price if it continues to decline.
The 2nd support level at 72.50 is also an overlap support and coincides with the 50% Fibonacci retracement level, making it a significant level to watch for potential price barriers. Till we did not advise to sell WTI Crude oil.
Support and Resistance Level: -
S1 74.64 - R1 76.47
S2 73.91 - R2 77.57
S3 72.80 - R3 78.30