WTI reaches two-week highs at around $88.00 on soft US Dollar

• Western Texas Intermediate (WTI), the US crude oil benchmark, has risen close to 4%.
• US inventories added 2.6 million barrels, above estimates but lower than Tuesday’s API’s 4.5 million build-ups.
• WTI Price Analysis: A move toward $90.00 is almost certain after regaining the 20/50-DMAs.

WTI soared during the New York session, propelled by the overall US Dollar weakening, tumbling more than 1%, while WTI’s exports hit an all-time high due to domestic refiners operating at a higher level. At the time of writing, WTI is trading at $88.05 per barrel after hitting a daily high of $88.38.

The US Dollar Index, a gauge of the buck’s value against a basket of peers, is stumbling for the second consecutive day, more than 1%, down from 111.135 highs to 109.774, a tailwind for the oil price.

Also, given the backdrop of the Organization of Petroleum Exporters Countries (OPEC) decision to cut oil output bolstered WTI price as the market prepares for tighter supply in the coming months. Additionally, the shortage of Russian products due to an oil embargo will have implications for inflation, according to Goldman Sachs, in a note quoted by Bloomberg.

In the meantime, US crude stockpiles rose by 2.6 million barrels, exceeding estimates but lower than data reported by the American Petroleum Institute (API), which showed a sharp increase of 4.5 million in US inventories. Furthermore, exports rose to 5.1 million BPD, the highest ever, while US imports dropped.

WTI Price Analysis: Technical outlook

WTI is neutral biased, though once it reclaimed the 20 and 50-day Exponential Moving Averages (EMAs) in the same trading session, a test of the $90.00 per barrel is on the cards. Notable, the Relative Strength Index (RSI) jumped in the last two days after oscillating around the 50-midline. So, as the RSI gathers bullish momentum, if oil buyers reclaim the $90.00 figure, a move towards the 100-day EMA at $94.05 would likely happen.