WTI Price Analysis: WTI jumps after Crude Oil Stocks data from the US

• WTI jumped from a low of $67.10 to a daily high of $69.40.
• EIA Crude Oil Stock declines were significantly higher than the consensus.
• US Dollar strength after Powell’s speech at the ECB forum may limit the upside potential for Oil.

The price of WTI (West Texas Intermediate) Crude Oil experienced a notable jump, rallying from a low of $67.10 and stabilizing around $69.42, seeing more than 2% gains. This surge was triggered by the EIA Crude Oil Stocks data release, which reported a significant drop in inventories that surpassed market expectations. However, the upside potential for oil prices may face limitations due to the recent strength of the US Dollar following Jerome Powell's speech at the ECB (European Central Bank) forum, in which he hinted at more rate hikes.

Crude Oil Stocks dropped more than expected in the third week of June.

According to the US Energy Information Administration (EIA), the Crude Oil stockpiles dropped by 9.603M in the week ending in June 23 vs the expected 1.757M drop. In that sense, as the data showed a larger-than-expected drop in Oil stocks, it suggests that demand for Oil is outpacing supply, indicating a tightening market and favouring the WTI price.

During the ECB forum in Sintra on Wednesday, Jerome Powell, the chairman of the Federal Reserve (Fed) of the US, delivered hawkish messages. He indicated that he would not rule out the possibility of making consecutive interest rate moves, considering that the labour market could push up inflation. While acknowledging the potential economic downturn, Powell stated it is not the most probable scenario. Since growth goes hand in hand with demand for Oil his comments appear to be boosting the prices of WTI.

It's worth noting that higher interest rates and a weaker economy tends to be negatively correlated with Oil prices. So, hawkish Fed expectations and weak signals from the US economy may challenge the Black Gold’s upside potential.

WTI Levels to watch

Based on the daily chart analysis, the short-term outlook for WTI (West Texas Intermediate) appears neutral. The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) have turned flat but remain in negative territory, suggesting a slight bearish dominance. 

Looking at the downside, support levels are identified at the $67.10 lows, followed by the $66.80 area and the $66.50 zone. These levels may provide temporary price support, potentially slowing downward movement. On the other hand, the first level to retake is located at the 20-day Simple Moving Average (SMA) of $70.33. If the price surpasses this level, the next resistance areas are around $70.50 and the psychological mark of $71.00.

WTI Daily chart