Crude Oil Price Update – Demand Growth Expectations Curtailed by Stronger Dollar, Recession Worries

U.S. West Texas Intermediate crude oil futures closed slightly lower on Wednesday in a choppy trade fueled by a much stronger U.S. Dollar, which dampened foreign demand and worries over rising interest rates, which would further strengthen the greenback while pushing the economy toward a demand-destructive recession.

On Wednesday, April WTI crude oil settled at $78.83, down $0.41 or -0.52%. The United States Oil Fund ETF (USO) settled at $69.04, down $0.36 or -0.52%.

EIA Reports Inventories Jump, IEA Predicts Late-Year Deficit

Crude oil’s losses were limited, however, as the market discounted a big build in U.S. crude stocks due to a data adjustment and as the International Energy Agency (IEA) forecast higher global oil demand growth.

U.S. crude stockpiles jumped by 16.3 million barrels last week to 471.4 million barrels, their highest since June 2021, the U.S. Energy Information Administration (EIA) said. Traders were looking for a 1.2 million-barrel increase.

Meanwhile, the IEA raised its forecast for 2023 oil demand growth and said there could be a supply deficit in the second half of the year.

Daily April WTI Crude Oil Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher.

A trade through $80.78 will change the main trend to up. A move through $76.76 will signal a resumption of the downtrend.

The minor trend is up. This is controlling the momentum. A trade through $76.76 will change the minor trend to down.

The nearest support is a pair of 50% levels at $77.77 and $76.76. The closest resistance is a retracement zone at $79.76 to $81.85.

Daily April WTI Crude Oil Technical Forecast

Trader reaction to the 50% level at $77.77 is likely to determine the direction of the April WTI Crude Oil market on Thursday.

Bullish Scenario

A sustained move over $77.77 will indicate the presence of buyers. If this creates enough upside momentum then look for a test of the 50% level at $79.76.

Overcoming $79.76 will likely lead to a test of the main top at $80.78. Taking out this level will change the main trend to up with the Fibonacci level at $81.85 the next major upside target.

Bearish Scenario

A sustained move under $77.77 will signal the presence of sellers. This could trigger a break into the support cluster at $76.76. This is a potential trigger point for an acceleration to the downside with $72.64 the next major target.