WTI nears weekly high above $79 amid caution ahead of OPEC+ meeting

  • Oil prices extend their rise as uncertainty ahead of the OPEC+ meeting neutralizes the impact of the Fed's declining rate cut prospects.
  • Easing Fed rate cut bets fails to increase US dollar's appeal.
  • Fed officials believe the slowdown in April's CPI report will not last.

He West Texas Intermediate (WTI), futures on NYMEX, rises towards the weekly high near $79.25 in the European session on Tuesday. Oil price extends winning streak for third straight session as uncertainty among investors ahead of OPEC+ meeting scheduled for June 2 offsets impact of declining bets tilted toward lower interest rates by the Federal Reserve (Fed) starting at the September meeting.

Investors warn that oil supply could shrink further if OPEC members extend the current cut of two million barrels per day. This will drive up oil prices due to supply concerns in an already tight market.

Meanwhile, market speculation about a Fed rate cut at the September meeting has subsided significantly and investors now expect the central bank to begin cutting interest rates in the final quarter of this year. The failure of the United States (US) April Consumer Price Index (CPI) report to generate confidence among monetary policy makers that progress in the disinflation process has resumed after stalling for three consecutive months has forced traders to reduce rate cut bets.

A sharp decline in the Fed's rate cut prospects has failed to lift the US dollar. The US Dollar Index (DXY), which tracks the value of the Dollar against six major currencies, extends its decline to 104.40.

Looking ahead, investors will focus on US core Personal Consumption Expenditure (PCE) Price Index data for April, due out on Friday. The Fed's preferred measure of inflation is estimated to have grown steadily on a monthly and annual basis at 0.3% and 2.8%, respectively. This would further weaken the case for Fed rate cuts in September.

WTI US OIL

Summary
Latest price today 78.76
Today's daily change 0.24
Daily change % today 0.31
Today's daily opening 78.52
Trends
SMA20 Journal 78.52
SMA50 Daily 81.43
SMA100 Journal 78.78
SMA200 Journal 79.57
Levels
Previous Daily High 78.65
Previous Daily Low 77.56
Previous Weekly High 80.06
Previous Weekly Low 76.04
Previous Monthly High 87.12
Previous Monthly Low 80.62
Daily Fibonacci 38.2% 78.23
Daily Fibonacci 61.8% 77.98
Daily Pivot Point S1 77.84
Daily Pivot Point S2 77.16
Daily Pivot Point S3 76.76
Daily Pivot Point R1 78.93
Daily Pivot Point R2 79.33
Daily Pivot Point R3 80.01

Source: Fx Street

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