WTI Surges On Inventory Dips And Geopolitical Woes

Fundamental Analysis

* Fueling Momentum: The price of crude oil has soared as supply concerns intensified and rising geopolitical risk that threaten to underwhelm supply. The US Energy Information Administration (EIA) revealed that crude oil stockpiles fell by 1.5 million barrels in the prior week, a figure below the anticipated 1.34-million-barrel rise forecasted by analysts. Further data showed that gasoline inventories dived almost three times estimates while distillate fuels grew. On top of that, Ongoing geopolitical developments remained a key factor influencing oil prices. Ukraine launched an attack on Russian refineries, resulting in a fire at one refinery on Wednesday. Russian President Vladimir Putin labeled it as an attempt to interfere with Russia’s presidential election.

Technical Analysis

* Technical Breakout: Crude oil price was traded higher following a breakout above the previous resistance level 79.55. MACD, which illustrates ongoing bullish momentum coupled suggest the pair to extend its gains further.

* Resistance And Targets: If the bullish momentum persists, the price is likely to head towards the resistance level of 80.80. Conversely, a breach back below the level 79.55 may suggest the commodity to experience a technical correction and head back towards 77.90.

Understand the concepts revolving MACD and support/resistance levels by reading our article on technical analysis.

Potential Risks

While the commodity currently gain support, the upside may be capped due to concerns over economy slowdown in China. Additionally, the stronger-than-expected US inflation data fueled speculations that the Federal Reserve (Fed) may delay interest rate cuts in the near term, which could hamper economic activity and dent Oil demand. Investors would exercise caution and seek further cues.

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Monitoring

Stay updated on oil related data, geopolitical news, and any shifts in the US Dollar’s strength by checking out our latest updates on daily financial news and market insights.

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Disclaimer: Trading derivatives involves high risks, and market conditions can change rapidly. The content is for informational purposes only and should not be considered as financial advice. Traders should conduct their own research and consider risk management strategies.