WTI remains pressured near weekly low as firmer DXY joins hopes of easing supply crunch. (Pivot Orderbook analysis)

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• WTI remains pressured near weekly low as firmer DXY joins hopes of easing supply crunch.
• US President Joe Biden vows consequences for Saudi Arabia after OPEC+ decision to cut oil supplies.
• Firmer yields, fears of recession and hawkish Fed bets add strength to the DXY.
• Risk catalysts, API Weekly Crude Oil Stock eyed for clear directions amid bearish bias.

The pair currently trades last at 87.21.

The previous day high was 90.36 while the previous day low was 86.83. The daily 38.2% Fib levels comes at 88.18, expected to provide resistance. Similarly, the daily 61.8% fib level is at 89.01, expected to provide resistance.

WTI holds lower ground near the $87.00 support confluence as US President Biden conveys his disappointment with the Organization of the Petroleum Exporting Countries and allies including Russia, known collectively as OPEC+, decision. Even so, the bears remain cautious at the weekly low during Wednesday’s Asian session.

Reuters mentioned that US President Joe Biden pledged on Tuesday that “there will be consequences” for US relations with Saudi Arabia after OPEC+ announced last week that it would cut oil production over US objections. The news also mentioned that Biden’s announcement came a day after powerful Democratic Senator Bob Menendez, chairman of the Senate Foreign Relations Committee, said the United States must immediately freeze all cooperation with Saudi Arabia, including arms sales. It’s worth noting that OPEC+ surprised markets by announcing a two million barrel-a-day output cut during the last week.

Other than the hopes of a delay in the supply cuts, already agreed by OPEC+, the risk-aversion wave and the firmer US Dollar Index (DXY) also weigh on the commodity prices.

That said, the DXY renews a fortnight top near 113.50 as firmer US Treasury yields join the hawkish Fed bets to keep greenback buyers hopeful ahead of today’s Federal Open Market Committee (FOMC) Meeting Minutes.

Also exerting downside pressure on black gold prices could be the International Monetary Fund’s (IMF) latest economic projections. On Tuesday, the IMF lowered the global economic growth forecast for 2023 to 2.7% from 2.9% estimated in July while citing pressures from high energy and food cost, rate hikes as the key catalysts for the move. It’s worth noting that the Washington-based institute left the 2022 growth forecast unchanged at 3.2% versus 6.0% global growth in 2021.”

To sum up, the risk-off mood joins hopes of easing the supply crunch to weigh on the black gold prices ahead of the private weekly inventory data from the American Petroleum Institute (API), prior -1.77M.

50-DMA and a two-week-old ascending support line highlight $87.00 as the short-term key support.

Technical Levels: Supports and Resistances

XTIUSD currently trading at 87.21 at the time of writing. Pair opened at 87.48 and is trading with a change of -0.31% % .

The pair is trading above its 20 Daily moving average @ 84.14, below its 50 Daily moving average @ 87.23 , below its 100 Daily moving average @ 96.52 and below its 200 Daily moving average @ 97.07

The previous day high was 90.36 while the previous day low was 86.83. The daily 38.2% Fib levels comes at 88.18, expected to provide resistance. Similarly, the daily 61.8% fib level is at 89.01, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 86.09, 84.69, 82.55
• Pivot resistance is noted at 89.62, 91.76, 93.16

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