WTI trims a part of strong gains to its highest level sine October, still well bid around $77.00

Source Fxstreet
  • WTI attracts strong follow-through buying amid worries about tightening global supply. 
  • Technical buying above the very important 200-day SMA contributes to the momentum.
  • Hawkish Fed expectations underpin the USD, which might cap gains for Crude Oil prices.

West Texas Intermediate (WTI) US Crude Oil prices build on Friday's strong move up and gain follow-through positive traction for the third straight day on Monday. The upward trajectory remains uninterrupted through the first half of the European session and lifts the commodity to the $77.60 area, or its highest level since October 8 in the last hour.

The US imposed tougher sanctions against Russia's oil industry, targeting nearly 200 vessels of the so-called shadow fleet and fueling worries about tighter supplies. Adding to this, speculations that US President-elect Donald Trump's administration may tighten sanctions against flows from Iran in the coming months turn out to be key factors that continue pushing Crude Oil prices higher at the start of a new week. 

Apart from this, the ongoing positive momentum could further be attributed to technical buying following Friday's acceptance above the very important 200-day Simple Moving Average (SMA) for the first time since August 2024. That said, a slightly overbought Relative Strength Index (RSI) on the daily chart might hold back bullish traders from placing fresh bets around Crude Oil prices and cap any further appreciation.

Moreover, sustained US Dollar (USD) buying, bolstered by hawkish Federal Reserve (Fed) expectations, could act as a headwind for the USD-denominated commodity. Investors now seem convinced that the US central bank will pause its rate-cutting cycle later this month and the bets were reaffirmed by the upbeat US Nonfarm Payrolls (NFP) report on Friday. This keeps the US Treasury bond yields elevated and underpins the USD.

WTI Oil FAQs

WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.

Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.

The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.

OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
EUR/USD wobbles ahead of US NFP reportEUR/USD steadies in a tight range around 1.0400 in Friday’s European session as the US Dollar (USD) trades cautiously ahead of the United States (US) Nonfarm Payrolls (NFP) data for January, which will be published at 13:30 GMT.
Author  FXStreet
9 hours ago
EUR/USD steadies in a tight range around 1.0400 in Friday’s European session as the US Dollar (USD) trades cautiously ahead of the United States (US) Nonfarm Payrolls (NFP) data for January, which will be published at 13:30 GMT.
placeholder
January NFP Preview: Divergent Employment Outlook – Can Gold’s New Highs Be Sustained?TradingKey - As the first nonfarm payrolls (NFP) report of 2025 approaches, the Federal Reserve’s rate cut prospects and markets such as gold and U.S. stocks face a critical test. Following unexpected
Author  TradingKey
9 hours ago
TradingKey - As the first nonfarm payrolls (NFP) report of 2025 approaches, the Federal Reserve’s rate cut prospects and markets such as gold and U.S. stocks face a critical test. Following unexpected
placeholder
Net Profit Doubles, Yet Stock Plummets—Is Amazon’s Q4 Earnings Report Really That Bad?TradingKey - On Thursday, February 7, tech giant Amazon (AMZN.US) released a mixed Q4 2024 earnings report after the market close. While revenue and profits exceeded expectations, disappointing guidan
Author  TradingKey
10 hours ago
TradingKey - On Thursday, February 7, tech giant Amazon (AMZN.US) released a mixed Q4 2024 earnings report after the market close. While revenue and profits exceeded expectations, disappointing guidan
placeholder
Gold edges higher ahead of US NFP reportGold’s price (XAU/USD) edges higher and trades back up near $2,865 at the time of writing on Friday after its rather sluggish performance the previous day.
Author  FXStreet
10 hours ago
Gold’s price (XAU/USD) edges higher and trades back up near $2,865 at the time of writing on Friday after its rather sluggish performance the previous day.
placeholder
Pound Sterling flattens against USD ahead of US NFPThe Pound Sterling (GBP) ticks lower to near 1.2420 against the US Dollar (USD) in Friday’s European session ahead of the United States (US) Nonfarm Payrolls (NFP) data for January, which will be published at 13:30 GMT.
Author  FXStreet
11 hours ago
The Pound Sterling (GBP) ticks lower to near 1.2420 against the US Dollar (USD) in Friday’s European session ahead of the United States (US) Nonfarm Payrolls (NFP) data for January, which will be published at 13:30 GMT.
goTop
quote