WTI falls for the second consecutive day on concerns about the passage of the US debt-ceiling bill and conflicting statements from oil producers. (Pivot Orderbook analysis)

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• WTI falls for the second consecutive day on concerns about the passage of the US debt-ceiling bill and conflicting statements from oil producers.
• Some Republicans express reluctance to pass the debt-ceiling pact, raising fears about the US government’s ability to meet its financial obligations.
• OPEC+ meeting on June 4 fuels market unease as speculations arise about potential oil production cuts.

The pair currently trades last at 69.79.

The previous day high was 73.58 while the previous day low was 72.06. The daily 38.2% Fib levels comes at 73.0, expected to provide resistance. Similarly, the daily 61.8% fib level is at 72.64, expected to provide resistance.

Western Texas Intermediate (WTI), the US crude oil benchmark plummets for the second straight day by more than 4%, spurred by woes about whether the US Congress will pass the US debt-ceiling bill as some Republicans had expressed that they would not pass the pact. That, alongside mixed messages by crude oil producers, exerts downward pressure on WTI. WTI is trading at $69.58 after hitting a daily high of $73.33.

News emerged during the weekend that US President Joe Biden and US House Speaker Kevin McCarthy sealed an agreement to suspend the debt ceiling until January 1, 2025, but it{s pending approval by the US Congress. US Treasury Secretary Janet Yellen said that the US government could not pay its debt by June 5.

Aside from this, the Organization of Petroleum Export Countries and its allies (OPEC+) would meet on June 4, one day before the US debt-ceiling deadline. Investors are nervous about the outcome of oil production, as the Saudi Arabian Energy Minister Abdulaziz bin Salman warned short sellers, which are betting that prices will fall.

That increased speculations that crude oil output could be cut, while Russian Deputy Prime Minister Alexander Novak signaled that the world’s third largest producer would keep production unchanged.

On April 6, Saudi Arabia and other OPEC+ members announced 1.2 million barrels cut per day, triggering a jump of 6% in oil prices. Nevertheless, prices stabilized and erased those gains.

WTI traders should be aware of the release of China’s business activity report late this week, alongside Global PMIs, which could give us clues about the pace of growth of the global economy.

Technical Levels: Supports and Resistances

XTIUSD currently trading at 69.79 at the time of writing. Pair opened at 72.96 and is trading with a change of -4.34 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 71.81, 50 SMA 74.73, 100 SMA @ 75.99 and 200 SMA @ 79.54.

The previous day high was 73.58 while the previous day low was 72.06. The daily 38.2% Fib levels comes at 73.0, expected to provide resistance. Similarly, the daily 61.8% fib level is at 72.64, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 72.15, 71.35, 70.63
• Pivot resistance is noted at 73.67, 74.38, 75.19

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