WTI falls on fears of an Asian earthquake and a weaker dollar

• Oil facilities around Turkey and Syria had reported little or no damage, limiting the fall in WTI.
• The Fed’s hawkish comments limited WTI’s recovery towards $80.00.
• WTI Price Analysis: Maintain bearish bias, eyeing $73.00.

WTI declines after testing weekly highs around $78.80 and falls towards the $77.70 area on Thursday amid further hawkish comments from the Fed against Fed Chairman Powell’s comments on Tuesday . In addition, speculation about damage to oil infrastructure after an earthquake in Turkey and Syria faded, which remained intact. At the time of writing these lines, WTI is trading at $77.63 per barrel.

Concern over the earthquake that struck Turkey and Syria earlier in the week, which killed more than 19,000 people, was a tailwind for US crude oil prices amid growing concern over damage to pipelines and oil infrastructures. Although it caused an outage for a few days, sources cited by Reuters said “we won’t lose that supply for as long as we thought.”

An additional factor undermining oil prices was a surprising US jobs report, which had investors on edge amid speculation that the US Federal Reserve would continue to aggressively tighten monetary conditions in the face of a already slowing economy.

Meanwhile, prospects for strong demand from China amid its easing of Covid-19 measures supported WTI prices as reports showed Chinese oil consumption would boost crude production by 1 million barrels per day.

That being said, WTI broke three days of straight gains, hitting a high around the 50-day EMA at $78.69, compounding a decline to the 20-day EMA at $77.71.

WTI Technical Analysis

From a technical point of view, the WTI markets appear to have topped out around the 50 day EMA during the current week. Although oil is printing a hanging man, a bearish signal, it is also in the process of forming a bearish engulfing candlestick pattern, which would trigger a stronger bearish reaction that could send prices lower.

Therefore, the first support for WTI would be $77.00 BP. A break of the latter and oil prices will head towards the February 7 daily low of $74.40, ahead of the weekly low of $72.30.