WTI tests $78.00 as Crude Oil continues rise, but headwinds are mounting

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  • WTI chalks in a seventh straight gain on Tuesday as geopolitical headlines remain.
  • A bumper US CPI inflation print keeps barrel prices capped.
  • US API Weekly Crude Stocks surged once again.

West Texas Intermediate (WTI) US Crude Oil climbed for a seventh consecutive day on Tuesday, testing the $78.00 per barrel price handle before settling near $77.40. Geopolitical tensions continue to keep Crude Oil bolstered, but an overhang in US crude supplies is weighing down energy markets, alongside a hotter-than-expected US Consumer Price Index (CPI) inflation print restraining investor sentiment.

US CPI inflation declines to 3.1% in January vs. 2.9% forecast

US CPI inflation came in higher and hotter than markets were hoping for, driving down money market expectations of a Federal Reserve (Fed) rate cut. The CME’s FedWatch Tool shows rate markets are now pricing in a first Fed rate trim in June, helping to keep oi barrel bids under pressure.

Geopolitics continue to be the main driver of Crude Oil upside momentum as a ceasefire in the Gaza conflict appears to be elusive, and the Russia-Ukraine conflict continues to slow burn on Eastern European markets as sanctions weigh on Russian Crude Oil markets.

The US’ American Petroleum Institute’s (API) weekly barrel counts showed a surprise buildup of 8.52 million barrels in the US Crude Oil supply stream, a much higher buildup than the forecast 2.6 million barrels. It is the largest buildup of US Crude Oil since the API’s mid-November barrel counts print.

WTI technical outlook

Near-term momentum in WTI US Crude Oil remains firmly bullish, with intraday action trading well above the 200-hour Simple Moving Average (SMA) near $74.72. WTI has traded north of the 200-hour SMA since crossing over the median technical barrier last week, and the near-term technical ceiling sits at Tuesday’s failed breach of the $78.00 handle.

Tuesday’s bullish push left WTI overextended into the 200-day SMA priced in near $77.36, and a failed bullish climb over the key technical indicator will leave WTI bids exposed to an extended backslide into early February’s bottom bids near $72.00.

WTI hourly chart

WTI daily chart

WTI US OIL

Overview
Today last price 77.37
Today Daily Change 0.42
Today Daily Change % 0.55
Today daily open 76.95
 
Trends
Daily SMA20 74.94
Daily SMA50 73.32
Daily SMA100 77.45
Daily SMA200 77.34
 
Levels
Previous Daily High 77.01
Previous Daily Low 75.51
Previous Weekly High 77.18
Previous Weekly Low 71.46
Previous Monthly High 79.19
Previous Monthly Low 69.41
Daily Fibonacci 38.2% 76.44
Daily Fibonacci 61.8% 76.08
Daily Pivot Point S1 75.97
Daily Pivot Point S2 74.99
Daily Pivot Point S3 74.48
Daily Pivot Point R1 77.47
Daily Pivot Point R2 77.99
Daily Pivot Point R3 78.97

 

 

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