WTI bounces off weekly lows and climbs to $73.50s following an inventory increase

• WTI trims some of its 9% losses attained during the week and reclaims the $73.00 mark.
• Recessionary fears sparked by weak PMI readings in China and the US dampened oil investors’ appetite.
• WTI Price Analysis: Downward biased as long as it stays beneath $82.00.

Western Texas Intermediate (WTI), the US crude oil benchmark, rebounds around month lows of $72.50 per barrel and climbs above the $74.00 mark courtesy of a sudden shut of a US fuel pipeline. Additionally, China’s reopening has been cheered by oil traders. At the time of writing, WTI exchanges hands at $73.65, up by 0.61%.

The oil market began 2023 with substantial losses of close to 9% on Tuesday and Wednesday, weighed by recessionary fears, following the release of US and China manufacturing activity reports, with both countries headed to a slowdown.

Sources quoted by Reuters said, “China’s pandemic and reopening challenges weigh on the market mood and put the bull thesis of a demand rebound under scrutiny.”

In the meantime, unscheduled maintenance to US pipeline operator Colonial Pipeline revealed that Line 3 had been shut for maintenance, resuming fuel flow on January 7. Therefore, WTI registered a slight jump n the day, reaching a daily high of $74.88.

According to market sources, the American Petroleum Institute inventories printed a rise in US crude and gasoline. Data revealed by the US Energy Information Administration (EIA) agency showed that Crude Production rose by 100K to 12.1M vs. 12.0M of previous data.

WTI Price Analysis: Technical outlook

Even though Thursday’s price action displayed a recovery on WTI prices, black gold continues to be pressured to the downside. WTI plummeted below the 50 and 20-day Exponential Moving Averages (EMAs) in the last couple of days and fell to fresh three-week lows at $72.50. Failure to extend beneath the latter opened the door to print a leg-up. But oscillators at bearish territories, like the Relative Strength Index (RSI) and the Rate of Change (RoC), portrayed further downside is expected.

WTI key support levels lie at $73.00, followed by $72.50, ahead of the 2022 yearly low of $70.10.