WTI extends declines as strong US Dollar and weak demand overshadow Fed rate cut
- WTI extends losing streak for the third day, set to close the week in negative territory.
- A firmer US Dollar and weak US fuel demand weigh on prices despite the Fed rate cut.
- WTI trades in a tight range between $64.30 resistance and $61.50 support, with RSI near 45 signaling weak momentum.
West Texas Intermediate (WTI) Crude Oil remains under pressure on Friday, extending its losing streak for the third straight day. The US benchmark has surrendered all the gains it notched earlier in the week and is now poised to end the week in negative territory.
At the time of writing, WTI is trading near $62.35 per barrel, down almost 1.30% on the day and pulling back from the two-week highs reached on Tuesday. The retreat reflects a firmer US Dollar (USD) and persistent demand concerns, as investors weigh the impact of slowing fuel consumption in the United States (US).
On the geopolitical front, the European Union (EU) proposed its 19th package of sanctions against Russia, including a plan to ban imports of Russian liquefied natural gas (LNG) from January 2027 and expand restrictions on Moscow’s so-called shadow fleet of tankers.
The Federal Reserve’s decision to cut interest rates by 25 basis points earlier this week has so far failed to provide meaningful support for crude. Lower borrowing costs typically boost demand for Oil and push prices higher, but the move was largely priced in, and concerns surrounding oversupply and weakening demand have overshadowed the Fed’s easing.
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From a technical perspective, WTI is trading in a narrowing range, with price action largely squeezed between the 100-day simple moving average (SMA) at $64.30 and horizontal support at $61.50, a level that has held firm since early August. Repeated rejections from the 100-day SMA underline its role as a strong resistance zone, while $61.50 remains the key floor in the near term.
A decisive break below $61.50 would expose the $60.00 support level. On the upside, bulls need a clear break above the 100-day SMA to shift the market structure from sideways consolidation to a more constructive, bullish outlook. The Relative Strength Index (RSI) is hovering around 45, suggesting weak buying interest and leaving risks tilted to the downside unless sentiment improves.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
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