WTI Price Analysis: It shoots after knowing the figures of the stocks of crude oil in the US.

• WTI went from a low of $67.10 to a daily high of $69.40.
• EIA crude oil stock draws were significantly higher than consensus.
• The strength of the dollar after Powell’s speech at the ECB forum could limit the upside potential of oil.

The price of WTI crude oil (West Texas Intermediate) experienced a notable jump, rallying from lows around $67.10 and stabilizing around $69.42, posting gains of over 2%. This rally was triggered by the release of EIA data on crude oil stocks, which reported a significant drop in inventories that exceeded market expectations. However, the upside potential of oil prices could be limited due to the recent strength of the US dollar after Jerome Powell’s speech at the ECB (European Central Bank) forum, in which he hinted at more rate hikes.

Crude oil stocks fell more than expected in the third week of June

According to the US Energy Information Administration (EIA), Crude Oil inventories fell by 9.603M in the week ending June 23 versus the expected fall of 1.757M. In this sense, as the data showed a greater than expected drop in oil stocks, it suggests that the demand for Oil is exceeding the supply, which indicates a restrictive market and favors the price of WTI.

During the ECB forum held on Wednesday in Sintra, Jerome Powell, president of the US Federal Reserve (Fed), launched aggressive messages. He indicated that he would not rule out the possibility of consecutive interest rate moves, considering that the labor market could drive up inflation. Although he acknowledged the possibility of an economic downturn, Powell said it’s not the most likely scenario. With growth going hand in hand with oil demand, his comments seem to be driving WTI prices up.

It is worth noting that higher interest rates and a weaker economy tend to be negatively correlated with oil prices. Therefore, the hawkish expectations of the Fed and the weak signals from the US economy could jeopardize the upside potential of the Black Gold.

WTI levels to watch

Based on daily chart analysis, the short-term outlook for WTI (West Texas Intermediate) looks neutral. The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) have turned flat but remain in negative territory, suggesting mild bearish dominance.

Looking to the downside, support levels are identified at the lows of $67.10, followed by the $66.80 zone and the $66.50 zone. These levels can provide temporary support for prices, potentially stopping the move lower. On the other hand, the first level to pick up is at the 20-day simple moving average (SMA) of $70.33. If the price breaks above this level, the next resistance zones are around $70.50 and the psychological level of $71.00.

WTI daily chart