WTI is trading with moderate gains below the $79.00 level, near the more than one-month low set on Friday.

  • WTI attracts some buyers on Monday amid modest USD decline inspired by US politics.
  • Geopolitical risks are also supporting oil prices, although China’s economic woes are limiting gains.
  • Friday’s break lower and close below the 50-day SMA warrant caution for bullish traders.

US West Texas Intermediate (WTI) crude oil prices are starting the new week on a positive note, reversing some of Friday’s heavy losses towards the $78.50-$78.45 region, a more than one-month low. The commodity is currently trading around the $78.85 region, up nearly 0.50% on the day, albeit lacking any strong follow-through buying.

US President Joe Biden announced his withdrawal from the presidential race on Sunday, prompting investors to unwind trades betting on a Trump victory. This adds to the growing acceptance that the Federal Reserve (Fed) will begin its rate-cutting cycle in September and caps the recent recovery of the US Dollar (USD) from a multi-month low touched last week. This, in turn, is seen lending some support to USD-denominated commodities, including crude oil prices.

Apart from this, concerns over supply chain disruption due to the protracted war between Russia and Ukraine and ongoing conflicts in the Middle East further act as a tailwind for the black liquid. Meanwhile, the initial market reaction to the US political development, however, turns out to be limited, which is evident from a modest rebound in the USD from the daily low. This, coupled with China’s economic woes, should keep a lid on any significant rise in crude oil prices.

Even from a technical perspective, Friday’s close below the 50-day simple moving average (SMA) could be considered a fresh trigger for bearish traders. Moreover, oscillators on the daily chart have just started gaining negative traction and suggest that the path of least resistance for the commodity is to the downside. Therefore, any subsequent move higher could be seen as a selling opportunity and risks fading quickly in the absence of relevant US macro data.

WTI Oil FAQs


WTI crude oil is a type of crude oil sold on international markets. WTI stands for West Texas Intermediate, one of three main types that include Brent and Dubai crude. WTI is also known as “light” and “sweet” for its relatively low gravity and sulfur content, respectively. It is considered a high-quality oil that is easily refined. It is sourced in the United States and distributed through the Cushing hub, considered “the pipeline crossroads of the world.” It is a benchmark for the oil market and the price of WTI is frequently quoted in the media.


Like all assets, supply and demand are the main factors determining the price of WTI crude oil. As such, global growth can be a driver of increased demand and vice versa in the case of weak global growth. Political instability, wars and sanctions can disrupt supply and impact prices. Decisions by OPEC, a group of large oil producing countries, are another key driver of price. The value of the US Dollar influences the price of WTI crude oil, as oil is primarily traded in US Dollars, so a weaker Dollar can make oil more affordable and vice versa.


The weekly oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) influence the price of WTI oil. Changes in inventories reflect fluctuations in supply and demand. If the data show a decrease in inventories, it may indicate an increase in demand, which would push up the price of oil. An increase in inventories may reflect an increase in supply, which pushes down prices. The API report is published every Tuesday, and the EIA report the following day. Their results are usually similar, with a difference of 1% between them 75% of the time. The EIA data is considered more reliable because it is a government agency.


OPEC (Organization of the Petroleum Exporting Countries) is a group of 13 oil-producing nations that collectively decide on member countries’ production quotas at biennial meetings. Their decisions often influence WTI oil prices. When OPEC decides to reduce quotas, it can restrict supply and drive up oil prices. When OPEC increases production, the opposite effect occurs. OPEC+ is an expanded group that includes ten other non-OPEC countries, most notably Russia.

Source: Fx Street

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