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| WTI Crude Oil Trades with Modest Losses as Market Awaits Fed Decision and EIA Inventory Data |
WTI crude oil prices have been struggling to maintain momentum as the US Dollar recovers and an unexpected build in inventory levels weighed on sentiment. Private inventory data released by the American Petroleum Institute (API) on Tuesday showed that weekly oil stocks increased by 3.262 million barrels for the week ended on March 17, compared to 1.155 million in the prior week. This data served to put pressure on the energy benchmark and contributed to the end of a two-day winning streak. The greenback’s corrective bounce also worked against the commodity, although its inability to maintain gains later in the day has helped to limit losses for WTI crude oil.
In addition to the rising inventory levels and the US Dollar’s recovery, the oil industry news has also been weighing on oil prices. News from Reuters suggesting that US oil refining industry officials expect to maintain their competitive edge in exporting fuel to Latin America, despite Brazil importing more Russian diesel, has provided a further bearish signal. Furthermore, China President Xi Jinping’s meeting with Russian counterpart Vladimir Putin, despite criticizing the West’s help to Ukraine, has had a negative impact on the oil market.
WTI crude oil traders are also waiting for clear signals from the upcoming Federal Open Market Committee (FOMC) monetary policy meeting and the weekly crude oil inventory data from the US Energy Information Administration (EIA). The EIA data is expected to show a drawdown of 1.448 million barrels versus 1.55 million barrels in the prior week.
From a technical analysis perspective, WTI crude oil prices are facing resistance near the $71.40 level, which is marked by a descending resistance line that has been in place for two weeks. Meanwhile, the December 2022 low near $70.30 provides support for the commodity.
In summary, WTI crude oil prices are facing headwinds from a stronger US Dollar, rising inventory levels, and negative industry news. Traders are also waiting for the FOMC meeting and EIA data to provide direction for the commodity. The technical outlook for WTI crude oil shows resistance near $71.40 and support near $70.30.
