Mitrade Insights is dedicated to providing investors with rich, timely and most valuable financial information to help investors grasp the market situation and find timely trading opportunities.
    2021
    Best News & Analysis Provider
    FxDailyInfo
    2022
    Best Forex Educational Resources Global
    International Business Magazine

    Oil dips as massive surge in US inventories offsets bullish sentiment

    FXStreet
    Updated Mar 27, 2024 13:03
    Mitrade

    • WTI Oil retreats below $82 on hefty increase in US crude stockpiles.  



    • Oil traders remain bullish, but the US stockpile build-up is difficult to ignore. 


    • The US Dollar Index trades above 104.00 and sees US Dollar bulls digging in their heels.



    Oil prices are retreating on Wednesday, with traders gasping for air after seeing the overnight print from the American Petroleum Institute (API), which saw a massive 9.337 million build-up in US stockpiles. A number not to ignore as it means that current production cuts from OPEC could be proven insufficient to keep prices well supported.


    Meanwhile, commodity analyst Natasha Kaneva from JP Morgan said that Brent futures could jump to $100 after Russia recently asked producers to limit their production in order to comply with OPEC+ production cut agreements. 


    The US Dollar, meanwhile, is in calm water and steady above 104.00 when measured by the US Dollar Index (DXY). Traders are building a fortress above 104.00 in order to defend the level ahead of the US Gross Domestic Product numbers on Thursday and the Personal Consumption Expenditures (PCE) Price Index on Friday. With the market expectations building up towards an upbeat PCE print, markets could see the US Dollar rally into the weekend as investors tune down the number of interest-rate cuts for 2024. 


    Crude Oil (WTI) trades at $80.83 per barrel, and Brent Oil trades at $85.29 per barrel at the time of writing. 



    Oil news and market movers: Bullish sentiment gets crushed


    • The US API reported a surprise build of 9.337 million barrels from a drawdown to 1.519 million barrels a week earlier.



    • This Wednesday, at 14:30 GMT, the US Energy Information Administration will release its stockpile change, with expectations for a drawdown of 1.275 million barrels.



    • Bloomberg reports that Libya has appointed Khalifa Abdul Sadiq as interim oil minister, replacing Mohamed Oun. Oun got suspended pending an investigation after possible violations that led to neglecting the rights of the Libyan State, circumventing the law and wasting public money.



    • Oil could see further gains if OPEC+ prolongs current production cuts until possibly the end of 2024. 



    Oil Technical Analysis: Holding for now


    Oil prices are retreating a touch after the staggering build-up in US stockpile numbers. This takes out the wind for Russia, which tried to push oil prices higher by limiting its oil production recently ahead of the OPEC+ meeting next week. The ball is in OPEC’s court now, with the possibility of prolonging current production cuts on the table. 


    Oil bulls will see $86 appearing as the next cap. Further up, $86.90 follows suit before targeting $89.64 and $93.98 as top levels. 


    On the downside, both $80.00 and $80.60 should be acting as support with the 200-day Simple Moving Average (SMA) as the level to catch any falling knives near $78.55. The 100-day and the 55-day SMA’s are near $75.64 and $77.15, respectively. Add the pivotal level near $75.27, and it looks like the downside is very limited and well-equipped to resist the selling pressure. 


    US WTI Crude Oil: Daily Chart

    US WTI Crude Oil: Daily Chart

     


     

    * 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.

    Do you find this article useful?
    Related Articles
    placeholder
    Crude Oil Trading: How To Invest In WTI/Brent Oil?Here we'll cover different ways to invest and trade in crude oil, including using Contracts for Difference (CFDs) on Mitrade. We'll also provide tips and strategies for successful trading.
    Author  Mitrade
    Here we'll cover different ways to invest and trade in crude oil, including using Contracts for Difference (CFDs) on Mitrade. We'll also provide tips and strategies for successful trading.
    placeholder
    WTI flirts with weekly trough, remains depressed below mid-$80.00sWest Texas Intermediate (WTI) US Crude Oil prices remain under some selling pressure for the third successive day on Friday and trades near the weekly low, around the $80.30 region during the Asian session.
    Author  FXStreet
    West Texas Intermediate (WTI) US Crude Oil prices remain under some selling pressure for the third successive day on Friday and trades near the weekly low, around the $80.30 region during the Asian session.
    placeholder
    WTI Oil Price Remains under Pressure at the $80.00 Level, Focus on the US Purchasing Managers' Index (PMI). The economic troubles in China are weighing on WTI oil price.
    Author  FXStreet
    The economic troubles in China are weighing on WTI oil price.
    placeholder
    WTI Price Analysis: Oil prices Drop as the USD Recovers, OPEC Cuts WTI declined towards $73.25, seeing 1.50% losses. The US Dollar measured by the DXY index rose towards 103.70, weighting on the black gold.
    Author  FXStreet
    WTI declined towards $73.25, seeing 1.50% losses. The US Dollar measured by the DXY index rose towards 103.70, weighting on the black gold.
    placeholder
    WTI Crude Oil Price Falls Below $80, Fails to Ignite Bullish Momentum on China's Economic Stimulus ProspectsEconomic events may prompt WTI crude traders to closely monitor additional catalysts to find clearer direction.
    Author  Mitrade
    Economic events may prompt WTI crude traders to closely monitor additional catalysts to find clearer direction.