WTI crude oil pares the biggest daily gains in a week, stays sidelined of late. (Pivot Orderbook analysis)

…
This is a premium post.
[s2If !current_user_can(access_s2member_level4)]Please register for PREMIUM VERSION HERE to read full post below containing analysis. In case of any error or you think you are not able to read the full post below, please email us at support#nehcap.com [lwa][/s2If] [s2If current_user_can(access_s2member_level4)]

• WTI crude oil pares the biggest daily gains in a week, stays sidelined of late.
• US shows readiness to release 15 million barrels of oil from SPR.
• Risk-aversion also challenges commodity’s recovery despite bullish EIA inventories.
• Risk catalysts are the key for fresh impulse as bears try to retake control.

The pair currently trades last at 84.49.

The previous day high was 85.48 while the previous day low was 81.29. The daily 38.2% Fib levels comes at 82.89, expected to provide support. Similarly, the daily 61.8% fib level is at 83.88, expected to provide support.

WTI crude oil prices retreat to $84.50 during Thursday’s Asian session, after bouncing off the weekly low the previous day.

The black gold’s latest weakness could be linked to the US announcement surrounding the release of the Strategic Petroleum Reserve (SPR). Also weighing on the quote could be the risk-off mood, which underpins the US dollar’s safe-haven demand.

As a part of the announcements, US President Joe Biden said that 15 million barrels of oil will be offered from the Strategic Petroleum Reserve (SPR) – part of a record 180 million-barrel release that began in May, and added the United States is ready to tap reserves again early next year to rein in prices.

On the other hand, UK-inspired risk-on mood faded after the strong inflation in the leading economies renewed fears of recession amid the central bankers’ aggressive stands despite economic slowdown fears. The price pressures in Britain, Eurozone and Canada were mostly nearly multi-month high and the core numbers, as well as services inflation, were firmer enough to push the central banks towards higher rates.

Adding to the risk-off mood, and weighing on WTI prices, were news surrounding China. The dragon nation registered four-month high covid numbers while the US readiness to tie up with Taiwan to co-produce American weapons, per Nikkei, adds to the Sino-American tussles.

In doing so, the black gold ignores weekly prints of stockpile data from the US Energy Information Administration (EIA). That said, the EIA Crude Oil Stocks Change dropped to -1.725M during the week ended on October 14 versus 1.38M expected and 9.88M prior.

Moving on, oil prices may witness hardships as the US-led efforts to ease the supply crunch fears join the broad risk-off mood to weigh on the prices. However, the OPEC+ output cut may help the black gold to push back the bears.

An eight-day-old resistance line near $84.60 precedes the 21-day EMA level surrounding $85.30 to restrict short-term WTI upside. That said, a six-week-long horizontal support near $81.50 appears a strong downside level to challenge the oil bears.

Technical Levels: Supports and Resistances

XTIUSD currently trading at 84.49 at the time of writing. Pair opened at 82.79 and is trading with a change of 2.05% % .

The pair is trading above its 20 Daily moving average @ 84.08, below its 50 Daily moving average @ 86.82 , below its 100 Daily moving average @ 95.12 and below its 200 Daily moving average @ 97.26

The previous day high was 85.48 while the previous day low was 81.29. The daily 38.2% Fib levels comes at 82.89, expected to provide support. Similarly, the daily 61.8% fib level is at 83.88, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 80.89, 78.99, 76.7
• Pivot resistance is noted at 85.09, 87.38, 89.28

[/s2If]
Join Our Telegram Group