WTI extends the rally near $78.90, US inflation data boosts Fed rate cut expectations

FXStreet
Updated May 17, 2024 06:11
Mitrade
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Source: DepositPhotos

■WTI prices gains traction near $78.90 on Friday.

■The softer US April inflation data, Fed rate cut expectations, and a drop in US crude inventories boost the black gold. 

■The ongoing geopolitical risks in the Middle East might cap the downside of WTI prices. 


Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around $78.90 on Friday. The black gold edges higher amid the recent drop in US crude inventories and the possible interest rate cuts by the Federal Reserve (Fed). 

The recent US CPI inflation report this week showed that US inflation eased slightly in April, prompting the expectation of interest rate cuts from the US Fed in September. This, in turn, weighs on the US Dollar (USD) and benefits USD-denominated oil as lower interest rates help stimulate the economy, which can boost crude oil demand.

About the data, a decline in oil inventories lifted the black gold. Crude inventories in the US for the week ending May 3 fell by 2.5 million barrels to 457 million barrels, from 1.36 million barrels drawn in the previous week, according to the Energy Information Administration (EIA). The market consensus projected that stocks would decrease by 1.35 million barrels. 

On Thursday, Israel's tanks moved into Jabalia in northern Gaza and pummelling Rafah in the south without advancing, per Reuters. Ceasefire negotiations mediated by Qatar and Egypt are at a stalemate, with Hamas demanding a stop to attacks and Israel refusing until the group is annihilated. Oil traders will closely monitor the developments surrounding the renewed geopolitical tensions in the Middle East. Any escalating geopolitical risks might raise concern about oil supply disruptions, lifting the WTI prices. 


WTI US OIL


Overview
Today last price 78.98
Today Daily Change 0.10
Today Daily Change % 0.13
Today daily open 78.88
 
Trends
Daily SMA20 80.14
Daily SMA50 81.52
Daily SMA100 78.36
Daily SMA200 79.67
 
Levels
Previous Daily High 79.3
Previous Daily Low 77.75
Previous Weekly High 79.56
Previous Weekly Low 76.71
Previous Monthly High 87.12
Previous Monthly Low 80.62
Daily Fibonacci 38.2% 78.71
Daily Fibonacci 61.8% 78.34
Daily Pivot Point S1 77.98
Daily Pivot Point S2 77.09
Daily Pivot Point S3 76.44
Daily Pivot Point R1 79.53
Daily Pivot Point R2 80.19
Daily Pivot Point R3 81.08

* The content presented above, whether from a third party or not, is considered as general advice only.  This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.

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