Crude Oil whips on Wednesday, surge in risk appetite sparks recovery in barrel bids

Source Fxstreet
  • WTI hits two-month low before recovering into familiar territory.
  • US CPI inflation eased further, bolstering rate cut hopes.
  • EIA barrel counts posted a steeper contraction than expected.

West Texas Intermediate (WTI) US Crude Oil sank to an eight-week low on Wednesday, tumbling below $76.40 before recovering into $78.40. Broad-market risk appetite surged during the US market session after falling US Consumer Price Index (CPI) inflation sparked further market hopes for Federal Reserve (Fed) rate cuts.

US CPI inflation eased in April, falling to 0.3% MoM compared to the forecast hold at 0.4%, and market bets on Fed rate cuts sparked a broad recovery in risk appetite, sending Crude Oil higher. Easing inflation helped bolster rate cut speculation, and the CME’s FedWatch Tool shows that rate markets are pricing in over 70% odds of a September rate trim from the Fed.

According to the Energy Information Administration (EIA), week-on-week Crude Oil Stocks Change fell faster than expected. EIA barrel counts decreased by -2.508 million barrels in the week ended May 10, below the forecast -1.35 million and slipping further back from the previous week’s -1.362 million barrel decline. With US Crude Oil reserves falling on a weekly basis, Crude Oil barrel bids found even further support as energy markets look for signs that US Crude Oil production will fail to meet or beat market demand.

WTI technical outlook

US Crude Oil dipped to a two-month low near $76.40 on Wednesday, tumbling through a near-term demand zone before quickly recovering back above the $78.00 handle. WTI remains on the bearish side, trading on the south side of the 200-hour Exponential Moving Average (EMA) at $78.70.

Daily candles show WTI stuck in recent consolidation, just below the 200-day EMA at $79.28 as energy markets struggle to develop bullish momentum. WTI is down around ten percent from April’s peaks near $87.00.

WTI hourly chart

WTI daily chart

WTI US OIL

Overview
Today last price 78.41
Today Daily Change 0.37
Today Daily Change % 0.47
Today daily open 78.04
 
Trends
Daily SMA20 80.48
Daily SMA50 81.51
Daily SMA100 78.28
Daily SMA200 79.72
 
Levels
Previous Daily High 78.91
Previous Daily Low 77.29
Previous Weekly High 79.56
Previous Weekly Low 76.71
Previous Monthly High 87.12
Previous Monthly Low 80.62
Daily Fibonacci 38.2% 77.91
Daily Fibonacci 61.8% 78.29
Daily Pivot Point S1 77.25
Daily Pivot Point S2 76.46
Daily Pivot Point S3 75.63
Daily Pivot Point R1 78.87
Daily Pivot Point R2 79.71
Daily Pivot Point R3 80.5

 

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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