– The crude oil price trended towards higher levels as market dynamics shifted.
– The Fitch rating reduction greatly influenced pricing, though its effects varied.
– Should the cautious market sentiment persist, might WTI encounter challenges?
Crude Oil Prices Targets Fresh Peaks
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Crude oil prices have remained resilient even as other growth-focused assets faltered on Wednesday.
WTI futures are slightly above US$ 82 per barrel, and Brent has surpassed US$ 85.50 per barrel.
Support for the oil’s high value might have come from the American Petroleum Institute (API) inventory data. This data showed a significant decrease of 15.4 million barrels for the week ending July 28th.
Today’s awaited US Energy Information Agency (EIA) weekly report will provide further insights into supply constraints.
In a notable move, Fitch, one of the leading credit rating agencies, has reduced the US sovereign debt rating from AAA to AA+, a change not seen in almost three decades.
US Treasury Secretary Janet Yellen criticized the move as ‘unfounded’ and ‘obsolete.’
Interestingly, despite the downgrade, Treasury bonds experienced a rally, with yields briefly declining before rebounding. The trend indicates a shift toward traditional safe assets, even if they are the subject of concern.
Contrarily, gold prices haven’t performed well, with the current rate falling below US$ 1,950.
Stock markets across the APAC region have encountered a challenging day, with projections indicating a tepid beginning for European and Wall Street markets.
Significant declines were observed in Hong Kong’s Hang Seng (HSI) and Japan’s Nikkei 225, both dropping over 2%.
In the currency arena, a cautious sentiment has been prevalent, with growth-centric currencies like the Australian and New Zealand Dollars facing the most substantial downturns today.
Upcoming US data includes MBA mortgage applications and the ADP employment change report.
WTI Crude Oil Prices – Technical Analysis
The WTI futures contract achieved a peak today, marking its highest in the last three months, a continuation of its impressive ascent throughout July.
Its upward trajectory has shown a consistent pattern. It’s price consistently staying within the Bollinger Band defined by the 21-day simple moving average (SMA).
Potential resistance may be observed between 82.50 and 83.50, an area marked by several past highs and turning points.
Looking downward, potential support levels could lie at the 260-day SMA of 79.62. The transition point of 77.33, or the previous low of 83.82, which aligns with the 100-day SMA.
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