WTI crude oil price rebounded from support

04 May 2023 226
WTI crude oil price rebounded from support

The Fed’s interest rate announcement and FOMC statements decreased the WTI crude oil price to the level of 64.64 per barrel.

The Federal Open Market Committee (FOMC) decided on Wednesday to raise interest rates by 25 basis points. UOB Group's Economist Lee Sue Ann comments on the Federal Reserve’s decision on further monetary policy.

According to the expert, the U.S. banking crisis has led to increased market concerns about the country’s economic outlook. This complicates the Fed’s fight against accelerating inflation. In case the regulator has no systemic impact on the U.S. financial sector, the country's central bank will continue to tighten its monetary policy.

The balance between supply and demand dynamics is yet to be seen, but reduced oil inventories might turn the WTI price upwards.

U.S. oil reserves declined for the third time in a row last week. Commodity inventories decreased by almost 1.3 million barrels. The U.S. Energy Information Administration (EIA) data were released on Wednesday. Contrary to expectations, gasoline stockpiles increased by 1.743 million barrels. Automotive fuel gasoline is the most consumed fuel product in the U.S. Distillate inventories declined slightly more than forecast, by 1.191 million barrels.

The EIA also reported that the Biden Administration released another 1.3 million barrels of oil from the Strategic Petroleum Reserve last week.

The continued reduction in oil inventories might indicate a possible rise in market demand, which could potentially result in higher WTI crude oil prices.

The main support of 64.34 was not broken on the H4 timeframe, but oil pricing is rather volatile, so the buffer support zone of 50 points is not a wide range. The price reached the buffer zone and rebounded from the 64.64 level, indicating a possible trend reversal. The Stochastic Oscillator (standard values) shows the price exiting the oversold zone, signaling the rise in WTI.


The short-term outlook for WTI suggests buying

The target is at the level of 75.60.

Part of the profit should be taken near the level of 71.55.

The Stop-loss is at the level of 64.34.

Bullish trend is of short-term nature, so it is worth selecting the trading volume of not more than 2% of your balance.

This content is for informational purposes only and is not intended to be investing advice.

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