WTI bears are in the market and eye break of $68.00

• WTI is pressured and near fresh cycle lows in $68.00.
• US Dollar is lower on the Fed as markets await the ECB.

WTI Crude Oil was heavily down on Wednesday with a drop-kicking in ahead of the Federal Reserve interest rate decision. Crude was posting a 5-week low and has been under pressure on concerns of a global slowdown that would only weigh on energy demand.  At the time of writing, Crude prices are trading at $68.08 WTI and have traveled between a high of $71.74 and a low of $68.02bbls. 

Among worries in the energy sector, the banking turmoil and the risks of tighter monetary policy from the world's central banks have played their roles. On Wednesday, the Federal Reserve raised interest rates by 25 bp ahead of Thursday´s European Central Bank meeting which is expected to raise rates by +25 bp as well.

Additionally, Crude prices maintained sharp losses following this Wednesday's mixed EIA inventory report. EIA gasoline supplies unexpectedly rose +1.74 million bbl versus expectations of a -1.5 million bbl draw. Also, crude stockpiles at Cushing, the delivery point of WTI futures, rose +541,000 bbl. The EIA report showed that (1) US crude oil inventories as of April 28 were -1.9% below the seasonal 5-year average, (2) gasoline inventories were -6.2% below the seasonal 5-year average, and (3) distillate inventories were -12.5% below the 5-year seasonal average. 

Analysts at TD Securities explained that crude oil prices were plummeting in line with the notable deterioration in commodity internals that have soured demand signals. ´´While energy markets have now begun to price in recession risks, prices remain notably more elevated than would be otherwise anticipated in the face of the deteriorating macroeconomic backdrop, given still elevated supply risk premia. ´´