WTI steady amid global rate decisions, poised for a weekly gain

• WTI crude oil is up by 0.28%, supported by PBoC’s rate cut.
• ECB’s rate hike and Fed’s rate hold contrast, influencing WTI’s movement.
• Increasing Chinese oil demand, OPEC+ output cuts lend support to WTI prices.

Western Texas Intermediate (WTI), the US crude oil benchmark, remained steady on Friday, gaining 0.28% or $0.50, set for weekly gains of more than 1%. The rate cut provided by the People’s Bank of China (PBoC) aimed to stimulate economic growth and improve oil’s outlook. At the time of writing, WTI exchanged hands at $70.75, up 0.21%.

China’s rate cut and OPEC+ output cut to prop up oil amid economic headwinds

Major global central banks decided to hold rates unchanged amidst worldwide elevated prices and an ongoing economic slowdown. The European Central Bank (ECB) raised rates to a 22-year high, while the Federal Reserve (Fed) “skipped” June’s meeting, though upward revised its peak rates to finish above the 5.50% threshold. Even though bolstered the greenback, Jerome Powell’s neutral commentary erased those gains, which weighed on WTI-s price.

Contrarily to the ECB and the Fed, the PBoC slashed rates after the Chinese economy failed to recover faster than expected, as recent data points to a loss In momentum. That capped oil prices rise after Saudi Arabia announced a cut on its crude oil output to begin in July.

Oil prices were underpinned by increasing demand in China, as its refinery output grew to its second-highest reading on record. Kuwait Petroleum Corp CEO estimates Chinese oil demand will increase towards the second half.

It is worth mentioning that voluntary crude output cuts implemented by the Organization of the Petroleum Exporting Countries and its allies (OPEC+) will curb supply in the near term. That, alongside a weaker US Dollar (USD), after the Fed-s hold rates unchanged, are tailwinds for WTI prices.

WTI Price Analysis: Technical outlook

From a technical perspective, WTI remains sideways after bottoming at around the $63.50/$68.00 area in the year. Even though technical indicators and price action suggest further downside, WTI is forming a double bottom that could propel prices to test the 200-day Exponential Moving Average (EMA) at $78.52. On the upside, WTI’s first resistance would be the 50-day EMA at $72.51, followed by the 100-day EMA at $74.70m, and then the 200-day EMA. On the downside, a fall below $66.85 would pave the way to challenge the YTD low at $63.61.