WTI takes a breather after three-day uptrend, seesaws around one-week top. (Pivot Orderbook analysis)

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• WTI takes a breather after three-day uptrend, seesaws around one-week top.
• EIA expects a record increase in oil output in Permian, DOE conveys the lowest US emergency oil stock since 1984.
• Chatters surrounding Russia-Ukraine tussle, China’s recovery and hawkish central banks also entertain traders.
• US inflation, API Weekly Crude Oil Stock will be important for fresh impulse.

The pair currently trades last at 87.74.

The previous day high was 86.78 while the previous day low was 82.36. The daily 38.2% Fib levels comes at 85.09, expected to provide support. Similarly, the daily 61.8% fib level is at 84.05, expected to provide support.

WTI crude oil remains sidelined at around $87.80, after refreshing the weekly high, amid mixed concerns over the supply and demand of the black gold. Also challenging the commodity prices could be the market’s cautious mood ahead of the key US inflation data, as well as the weekly industry report of the oil inventories.

“Oil output in the Permian Basin in Texas and New Mexico, the biggest U.S. shale oil basin, is due to rise 66,000 barrels per day (bpd) to a record 5.413 million bpd in October, the U.S. Energy Information Administration (EIA) said in its productivity report on Monday,” mentioned Reuters. It should be noted that the US halted further increase in the Strategic Petroleum Reserve (SPR) release during the last week, which in turn signaled a notable improvement in the supply situation. Even so, Reuters quotes Energy Secretary Jennifer Granholm as saying, “The Biden administration is weighing the need for further SPR releases after the current program ends in October.”

On the other hand, Reuters quotes the US Department of Energy (DOE) data to mention that the US emergency oil stocks fell to the lowest level since October 1984, declining 8.4 million barrels to 434.1 million barrels in the week ended September 9. On the same line could the chatters surrounding the European Union’s embargo on Russian oil, as well as the Western leaders’ oil price cap on Moscow’s energy exports.

Elsewhere, uncertainty surrounding the US-Iran oil deal and the likely retaliation of Russia, after retreating from some parts of Ukraine, join the likely increase in China’s stimulus to also underpin the oil’s upside move.

It should be noted that the risk-on mood and the US dollar weakness are on the same line that favors the oil buyers. That said, the US Dollar Index (DXY) printed a four-day downtrend to fall to the lowest levels in a fortnight, around 108.30 at the latest.

Moving on, US CPI for August becomes crucial after the latest softness in the price pressure. The forecasts suggest the headline number ease to -0.1% MoM versus 0.0% prior while the CPI ex Food & Energy is likely to remain unchanged at 0.3% MoM. Also important will be the American Petroleum Institute’s (API) Weekly Crude Oil Stock data, prior 3.645M.

WTI crude oil prices dribble between the 10-DMA and the 21-DMA, respectively around $86.20 and $89.00. However, the impending bull cross on the MACD and steady RSI (14) keeps buyers hopeful.

Technical Levels: Supports and Resistances

XTIUSD currently trading at 87.74 at the time of writing. Pair opened at 85.78 and is trading with a change of 2.28% % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 89.05, 50 SMA 92.85, 100 SMA @ 101.19 and 200 SMA @ 95.74.

The previous day high was 86.78 while the previous day low was 82.36. The daily 38.2% Fib levels comes at 85.09, expected to provide support. Similarly, the daily 61.8% fib level is at 84.05, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 83.17, 80.55, 78.75
• Pivot resistance is noted at 87.59, 89.39, 92.01

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