The Strategic Petroleum Stockpile (SPR) of the United States may soon be reduced by 26 million barrels, a move that could bring the reserve to its lowest level since 1983.
Energy traders who were banking on the DOE canceling the auction were surprised by the statement. Additionally, it made it simpler for WTI to move down from the $80.00 level.
Will the resistance at 80.00 hold? Or will additional sellers enter the market before the bullish momentum drives WTI to higher technical resistance levels?
Technically speaking, WTI crude is now trading close below a zone of range resistance that hasn't been broken since mid-November.
Additionally, stochastic is in favor of greater selling because of a slight bearish divergence with the higher highs of the price.
We might learn more about the future course of WTI crude with today's U.S. CPI announcement.
Markets anticipate a slowdown in January's annual inflation rate from 6.5% to 6.2%. Despite a continually robust job market, more traders can price in a Fed pivot if the rest of the data points suggest a downturn.
If not the 82.50 range resistance zone, a risk-friendly trading environment might push WTI oil back to its prior high of 80.70.
However, if this week's widely monitored news releases stimulate risk aversion in the markets or support further Fed rate hikes, then 80.00 might act as resistance and push WTI down to the 78.00 mid-range levels.
