WTI Crude Oil Prices Edge Lower Ahead of US PCE Report

Highlights

1. WTI crude oil down 4% for the month
2. U.S. PCE inflation figures to impact Fed policy and USD
3. House of Representatives passes bill to boost oil and gas production

Overview

U.S. benchmark West Texas Intermediate crude oil prices are down on Friday, putting the market in a position to record its weakest monthly performance since November.

At 08:48 GMT, June WTI crude oil is trading $74.14, down $0.35 or -0.47%. On Thursday, the United States Oil Fund ETF (USO) settled at $65.31, up $1.16 or +1.81%.

Prices are weaker ahead of the release of important U.S. inflation data, which could provide insight into future interest rate adjustments and the strength of the dollar. A weaker greenback tends to drive up foreign demand for dollar-denominated crude oil.

US PCE Inflation Figures Could Impact WTI Crude Oil Prices

WTI crude oil prices are down 4% for the month, due to concerns over a global banking crisis, which abated after two banks were rescued.

The markets are now waiting for U.S. PCE inflation figures, which are expected to ease to 0.4% in February. This data could impact Fed policy and the U.S. Dollar.

On Thursday, the U.S. House of Representatives passed a bill to boost U.S. oil and gas production while reducing climate initiatives.

Oil prices were buoyed by reduced output in oilfields in northern Iraq and data showing a two-year low in U.S. crude oil stockpiles. China’s manufacturing activity rose in March, albeit at a slower pace compared to February’s record-breaking expansion. Meanwhile, OPEC and allies led by Russia are expected to maintain their existing deal to cut oil output at a meeting on Monday.

Daily June WTI Crude Oil Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher. A trade through $80.97 will change the main trend to up. A move through $64.58 will signal a resumption of the downtrend.

The minor trend is up. This is controlling the momentum. A trade through $72.76 will change the minor trend to down.

The short-term range is $80.97 to $64.58. The market is currently trading inside its retracement zone at $72.78 to $74.71.

The major resistance zone is $75.49 – $78.06. The major support level is $68.76.

Daily June WTI Crude Oil Technical Forecast

Trader reaction to $74.71 is likely to determine the direction of the June WTI crude oil market on Friday.

Bullish Scenario

A sustained move over $74.71 will indicate the presence of buyers. If this generates enough upside momentum then look for a surge into $75.49 – $78.06.

Bearish Scenario

A sustained move under $74.71 will signal the presence of sellers. This could trigger a sharp break into the support cluster at $72.78 – $72.76.

Taking out $72.76 will shift momentum and could trigger a break into $70.87.