WTI Crude Oil rallies above $82.70 on risk-on impulse, Fed’s end tightening cycle

• WTI Crude Oil climbs more than 1.80%, rising above $82.00 per barrel, as US Dollar weakens.
• Investors react positively to Federal Reserve's decision to keep rates unchanged, despite possible hawkish pullback.
• Bank of England's decision to keep rates on hold and gloomy economic outlook cap WTI's rally.

West Texas Intermediate (WTI), the US Crude Oil benchmark, climbed more than 1.80% on Thursday, snapping three days of losses, rising above $82.70 per barrel, gaining 2.28%.

US Crude Oil benchmark rises, snapping three days of losses as investors react positively to Fed's decision

Investors seem convinced the US Federal Reserve (Fed) ended its tightening cycle, as Wall Street prints gains, US Treasury bond yields plunge for the second straight day, while the Greenback prolongs its agony, falling to new two-day lows, as shown by the US Dollar Index (DXY).

On Wednesday, the Fed kept rates unchanged at the 5.25%-5.50% range and reaffirmed its commitment to curb high inflation. Despite that, investors reacted positively to Powell and Co. decision, though they remain at risk of a possible hawkish pullback by the Fed.

This is because Powell said that higher rates at the long-term of the curve were helping to keep monetary conditions restrictive. Nevertheless, rates remained high on speculations for additional rate hikes. That, along with US Dollar weakness, augmented demand for Oil, as restrictive policies are seen as a threat to dent demand.

Besides that, the Bank of England (BoE) decided to keep rates on hold on Thursday, early in the North American session, on expectations the BoE reached peak rates amidst a gloomy economic outlook.

Nevertheless, the latest PMI reports are caping WTI’s rally. On Wednesday, the ISM Manufacturing PMI for October slumped below the contractionary/expansionary threshold, suggesting the economy is decelerating. That echoes some of China’s issues after the National Bureau of Statistics (NBS) and Caixin revealed that business activity on the manufacturing front remains at recessionary levels.

WTI Technical Levels