WTI turns red below $80.00, Fed’s hawkish remarks limit gains

Source Fxstreet
May 29, 2024 04:31
  • WTI prices edge lower near $79.90 on Wednesday, down 0.20% on the day.
  • The stronger USD and Fed’s hawkish stance weigh on the black gold.
  • OPEC is widely anticipated to maintain this level of output reduction until the end of the year.

Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around $79.90 on Wednesday. The black gold turns red amid renewed US Dollar (USD) demand and the hawkish remarks from the US Federal Reserve (Fed). 

Several Fed officials delivered hawkish remarks in recent weeks after data showed that US inflation is stickier than expected. On Tuesday, Fed Minneapolis President Neel Kashkari said that the central bank should wait for significant progress on inflation before cutting interest rates. The higher-for-longer US interest rate narrative continues to weigh on the black gold as it increases the cost of borrowing, which can dampen economic activity and oil demand.

On the other hand, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia (OPEC ), will hold a virtual meeting on June 2 to review its production policy. Analysts expect that OPEC will maintain crude supply curbs at 2.2 million barrels per day, which might limit the downside for WTI prices.“OPEC countries are unlikely to raise production given that the current price of Brent is closer to $80 per barrel than $90 per barrel,” said Deutsche Bank analyst Michael Hsueh.

Early Wednesday, the International Monetary Fund (IMF) upgraded China's 2025 economic growth target to 4.5% from 4.1%. The positive development surrounding China’s economic outlook might lift WTI prices since China accounts for 80% of non-OECD oil consumption, making it the world's biggest oil importer.

WTI US OIL

Overview
Today last price 79.92
Today Daily Change -0.17
Today Daily Change % -0.21
Today daily open 80.09
 
Trends
Daily SMA20 78.46
Daily SMA50 81.38
Daily SMA100 78.87
Daily SMA200 79.57
 
Levels
Previous Daily High 80.12
Previous Daily Low 78.35
Previous Weekly High 80.06
Previous Weekly Low 76.04
Previous Monthly High 87.12
Previous Monthly Low 80.62
Daily Fibonacci 38.2% 79.44
Daily Fibonacci 61.8% 79.02
Daily Pivot Point S1 78.92
Daily Pivot Point S2 77.75
Daily Pivot Point S3 77.15
Daily Pivot Point R1 80.69
Daily Pivot Point R2 81.29
Daily Pivot Point R3 82.46

 

 

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