West Texas Intermediary (WTI) dipped below $83.20 per barrel on Wednesday, pushed lower as markets eased off supply concerns and rising US Treasury yields put downside pressure on risk assets.
The Organization of the Petroleum Exporting Countries (OPEC) saw a meeting of its Joint Ministerial Monitoring Committee (JMMC), which reaffirmed OPEC’s crude production cuts through the end of 2024 in order to support crude oil prices. The JMMC has no outright decision-making powers, but rather makes recommendations that are then reviewed at following OPEC ministerial meetings.
Saudi Arabia and Russia both reaffirmed their current output reductions, with Saudi Arabia keeping their reduced crude output and Russia holding their exportation cap through the end of the year. Both countries are set for a “review” of their respective output reduction caps next month.
Ongoing market concerns about a chronic undersupply of global crude oil demand are beginning to wane as crude oil reserves see relief on the horizon. US crude oil inventories continue to decline, but the pace of drawdown is slowing as gasoline reserves begin to surge as production facilities ramp up the conversion of crude oil into down-market products in order to take advantage of eye-watering barrel costs.
JP Morgan analyst Natasha Kaneva expects oil inventory drawdowns likely to pivot to slight rebuilds in the final months of the year.
The US’ Energy Information Administration (EIA) showed crude oil inventories declined 2.2 million barrels last week, compared to 4.2 million barrels the week before, and a surprise 6 million-barrel jump in gasoline stockpiles.
Wednesday’s drop into 83.20 sees WTI crude oil prices making a bearish break of a bullish trendline from June’s bottoms near $67.15, and sellers will be looking to make an extended run into the 200-day Simple Moving Average (SMA) near $77.40.
Technical indicators are cycling into the low end, and the Relative Strength Index (RSI) is set to ping oversold territory, currently declining to 38.93 with WTI down 11% from 13-month highs at $93.98 just five trading days ago.
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EUR/USD continues to fluctuate in negative territory at around 1.0550 on Wednesday. The US Dollar stays resilient against its rivals following the Fed's decision to leave the policy rate unchanged and limits the pair's upside ahead of Powell's presser.
GBP/USD lost its traction after rising above 1.2150 and declined toward 1.2100. The US Dollar holds its ground following the Fed's decision to stand pat on policy. Investors await Chairman Jerome Powell's comments on the outlook.
Gold lost its traction and fell to the $1,980 area. Although the 10-year US Treasury bond yield is down more than 2% on the day, the broad-based US Dollar strength following the Fed's decision to leave the policy rate unchanged doesn't allow XAU/USD to stage a rebound.
Crypto derivatives exchange Bitget announced the delisting of TOKEN after the exchange was left with a $10 million hole. The platform listed the fake TOKEN, after the Floki team requested not to list the asset until seven days after it goes live.
US private sector job creation is expected to rebound to 150,000 in October. The previous ADP report came below expectations, recording a gain of 89,000 jobs, marking the slowest growth since January 2021.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer.
Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.
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WTI Crude Oil accelerating declines towards $83, OPEC recommends maintaining prodution reduction – FXStreet
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