WTI over $83 as more volatility for crude oil

1 min read

West Texas Intermediate (WTI) started Tuesday on the low side, falling below $81.00 per barrel before a broad-market recovery in risk appetite dragged barrel bids into a fresh high above $83.00.

US Purchasing Managers Index (PMI) figures printed much softer than expected, sparking renewed hopes of a weakening US economy forcing the Federal Reserve to begin cutting rates sooner than previously expected.

Crude oil markets remain exposed to downside moves as recent geopolitical tensions ease after Iran announced it would not seek further retaliation against Israel.

The benchmark WTI’s recent climb sparked by ongoing fears of a Middle East conflict spilling over into an all-out war faltered near $87.00 per barrel as cooler heads prevail.

US data is set to continue driving financial markets through the rest of the trading week.

US gross domestic product (GDP) figures are slated for Thursday, where investors are expecting, or hoping, for US GDP for the annualised first quarter to ease to 2.5% from the previous 3.4%.

On Friday, the personal consumption expenditure (PCE) Price Index inflation data will be released, which is forecast to hold steady at 0.3% MoM.

WTI technical outlook

WTI crossed $83.00 per barrel after recovering from Tuesday’s bottom bids just below $81.00. The day’s late-stage rally brought the crude oil prices just above the 200-hour Exponential Moving Average (EMA).

Despite Tuesday’s late rally, the US crude remains knocked off of recent gains, with WTI down around 4.5% from April’s swing highs near $87.00 per barrel. On the low side, long-term technical support sits at the 200-day EMA, holding near $79.23.

(Source: OANDA)