WTI seems vulnerable near $77 as hawkish Fed dents demand outlook

FXStreet
Updated May 24, 2024 05:24
Mitrade
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Source: DepositPhotos

■The Oil price sets to conclude the week on a bearish note.

■Fed officials believe that the decline in US inflation observed in April won’t be long-lasting.

■OPEC members are scheduled to meet on June 1 to discuss supply policy.


West Texas Intermediate (WTI), futures on NYMEX, look set to close the week on a bearish note. The Oil price has extended its losing spree for the fifth trading session on Friday. The black gold has remained under pressure for the entire week as Federal Reserve (Fed) policymakers maintain a hawkish guidance on interest rates despite an expected decline in the United States Consumer Price Index (CPI) report for April.


Fed officials are uncertain about a resumption in progress in the disinflation process, given the strength in the labor market. Policymakers are clear that rate cuts will be considered only if they get greater confidence that inflation will sustainably return to the desired rate of 2%.


The Federal Open Market Committee (FOMC) minutes for the May meeting indicated that a few policymakers have supported for tightening the monetary policy further to be sure that price stability will be achieved. While Fed Chair Jerome Powell and the majority of other policymakers said that more rate hikes are unlikely.


The Fed's hawkish outlook on interest rates is unfavorable for the Oil price. Higher interest rates reduce the flow of liquidity into the economy, which negatively influences consumer spending and factor activities and eventually impacts overall oil demand.


The next trigger for the Oil price will be the OPEC meeting scheduled for June 1, during which members will discuss the supply policy. In the last meeting on April 13, oil-rich nations made no change in the current voluntary oil output cut, which is 2.2 million barrels per day.


WTI US OIL


Overview
Today last price 76.74
Today Daily Change -0.12
Today Daily Change % -0.16
Today daily open 76.86
 
Trends
Daily SMA20 79
Daily SMA50 81.52
Daily SMA100 78.68
Daily SMA200 79.59
 
Levels
Previous Daily High 78.55
Previous Daily Low 76.34
Previous Weekly High 79.63
Previous Weekly Low 76.38
Previous Monthly High 87.12
Previous Monthly Low 80.62
Daily Fibonacci 38.2% 77.18
Daily Fibonacci 61.8% 77.7
Daily Pivot Point S1 75.95
Daily Pivot Point S2 75.04
Daily Pivot Point S3 73.73
Daily Pivot Point R1 78.16
Daily Pivot Point R2 79.46
Daily Pivot Point R3 80.37

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