Crude Oil (WTI) Talking Points
- US Crude oil prices fall to 15-month lows with excess supply driving prices below $70 per barrel.
- WTI Crude extends losses, shedding 5% in today’s session.
- Oil supply rises to 18-month high while the weekly EIA report shows 1.55M barrels added to US stockpiles (higher than the forecasted 1.188M).
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US Crude oil extends sheds 5% – Rising supply and elevated fears of a banking crises drive losses
Crude oil prices are currently facing their third-consecutive day of declines, pushing WTI (US oil) below $70 per barrel. With diminishing growth forecasts and rising supply overshadowing China’s reopening, the collapse of SVB and financial instability have contributed to the recent slump.
Although US authorities have attempted to ease fears over a broader contagion in the banking sector, the financial turmoil of Swiss bank, Credit Suisse poses an additional threat to the global economy.
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At the same time, the IEA (International Energy Agency) reported an increase in oil inventories, driving the supply of oil to an 18-month high.
The weekly EIA report has echoed these concerns, with US stockpiles rising by 1.55M barrels last week, higher than the estimated 1.188M.
DailyFX Economic Calendar
The weekly data was released by the EIA (Energy Information Administration) earlier today, showed an increase in the number of commercial barrels of oil held by US firms.
US Crude Oil (WTI) Technical Analysis
As fundamentals continued to weigh on sentiment, US Crude (WTI) extended losses, breaking prior support (now resistance) holding at the key psychological level of $70.00. With prices currently trading around 5% lower on the day, a weekly decline of over 12% (at the time of writing) has sent the CCI (commodity channel index) into oversold territory.
Meanwhile, the downturn has pushed price action toward the 200-week MA (moving average), providing support at $66.00.
WTI (CL1) Daily Chart
Chart prepared by Tammy Da Costa using TradingView
WTI Crude Oil Key Levels
of clients are net long. of clients are net short.
— Written by Tammy Da Costa, Analyst for DailyFX.com
Contact and follow Tammy on Twitter: @Tams707