WTI rises back above $75.00, despite an increase in US inventories

• Western Texas Intermediate prices advance more than 2%, trimming its Wednesday losses.
• US stockpiles have increased the most since 2021, as reported by the US EIA.
• Russia’s plan to cut its oil output supported WTI and oil prices.

Western Texas Intermediate (WTI), the US crude oil benchmark, advances shy of 2% on Thursday, trimming some of its Wednesday’s losses spurred by a strong US Dollar (USD). Nevertheless, WTI is staging a comeback, exchanging hands at $75.78 per barrel.

Sentiment shifted sour as the US Dollar extended its gains, capping oil’s rally. The US Dollar Index (DXY) advances 0.24%, up at 104.752 for the third consecutive day, bolstered by the Fed’s latest monetary policy minutes.

On Wednesday, the Federal Reserve revealed its latest meeting minutes which were tilted hawkish, with policymakers agreeing to raise rates 25 bps, while few members wanted a 50 bps hike. Officials acknowledged the labor market’s tightness and warranted further increases to curb elevated inflation.

Data from the US Energy Information Administration on Thursday showed that oil inventories have risen to their highest level since May 2021. Crude oil stockpiles grew by 7.6 million barrels to 479 in the last week ending February 17, 2023. Meanwhile, inventories in Cushing, Oklahoma, jumped to 40.4 million, the highest level since June 2021.

WTI retreated on the data release, though Russia’s intention to reduce its oil exports from western ports in March by as much as 25% reignited fears of an oil shortage. Consequently, WTI and Brent’s prices have jumped.

In another data, the US Department of Labor revealed that unemployment claims continued downward, while the US economy grew at a 2.7% pace quarterly in Q4 2022, lower than the 2.9% previous reading. The greenback rallied on the data and weighed on WTI, which retreated from daily highs around $75.92.

WTI Key technical levels