WTI crude oil briefly surpassed the $85 mark, a first since November, before experiencing a slight decline. Despite this, it is likely to end the week over 3% higher due to increased demand from American refiners. The shift from maintenance to operation phases has significantly tightened motor fuel supplies, suggesting the potential for further price increases.
Concerns linger around the Federal Reserve’s capacity to slash interest rates amidst persistent inflation, hovering above the 2% target. Interest rate reductions are crucial for fostering demand growth within the U.S., influencing WTI prices.
IEA’s Optimistic Demand Outlook
The International Energy Agency (IEA) has increased its 2024 oil demand forecast for the fourth time since November, attributing the revision to Houthi attacks that caused delays in Red Sea shipping.
The IEA now anticipates a 1.3 million bpd increase in demand, foreseeing a slight supply deficit if OPEC+ maintains its production cuts.
US Rig Count Signals Output Expansion
The U.S. witnessed a substantial increase in oil and natural gas rigs, marking the most significant weekly gain since September. This uptick suggests a potential rise in future output, with oil rigs reaching a six-month high, reflecting growing production capabilities.
Geopolitical Tensions and Currency Strength
The escalation in Ukrainian attacks on Russian oil facilities and a stronger U.S. dollar have also influenced WTI prices. Despite the dollar’s strength, which could potentially make crude more expensive for non-dollar users, geopolitical tensions and supply disruptions provide upward pressure on prices.
In conclusion, the crude oil (USOIL) price forecast remains cautiously optimistic, with supply constraints, geopolitical tensions, and economic indicators shaping the market landscape. Investors and analysts alike closely monitor these developments, gauging their impact on future WTI pricing trends.
WTI Crude Oil Price Prediction: Technical Outlook
WTI Crude Oil experienced a minor setback, slightly descending by 0.04% to settle at $80.97, reflecting a cautious market sentiment. The pivot point at $80.59, which determines the immediate market direction, represents the pivotal moment for USOIL.
Surpassing this threshold, USOIL faces a series of resistance levels at $82.48, $83.82, and $85.20, each presenting a potential ceiling that could cap upward momentum. Conversely, the commodity finds immediate support at $79.47, with further cushions at $77.33 and $75.59, pivotal in preventing a steeper decline.
A bullish crossover above the $80.60 level, which highlights the technical picture, suggests that USOIL might try to test the area around $82.45.
The Relative Strength Index (RSI) at 63 and the 50-day Exponential Moving Average (EMA) at $77.16 both indicate underlying bullish sentiments, which further support this upward trajectory. However, an ascending trendline and USOIL’s support at around $79 highlight the market’s tenacity.
In summary, WTI Crude Oil’s immediate future hangs in balance, with a breach above the pivot point signalling potential bullish undertones.