WTI Oil Moves Higher As EIA Report Shows That Crude Inventories Declined

Key Insights

• WTI oil is trying to settle above the resistance level at $88.50.
• Natural gas rebounds after yesterday’s sell-off. 
• Precious metals move higher as U.S. dollar pulls back ahead of the Fed decision. 

WTI Oil Gains Some Ground As Domestic Oil Production Declines

WTI oil tested resistance at $88.50 after the release of the EIA Weekly Petroleum Status Report, which indicated that crude inventories declined by 3.1 million barrels from the previous week. Analysts expected that crude inventories would increase by 0.4 million.

Total motor gasoline inventories declined by 1.3 million barrels, while distillate fuel inventories increased by 0.4 million barrels. U.S. crude oil imports remained flat at 6.2 million bpd.

Interestingly, domestic oil production decreased from 12 million bpd to 11.9 million bpd. The decline in the domestic oil production may serve as a bullish catalyst for oil markets.

Currently, WTI oil is trying to settle above the resistance at $88.50. In case this attempt is successful, WTI oil will move towards the next resistance at the $90 level. A move above $90 will push WTI oil towards the resistance at $91.30. In case WTI oil gets above $91.30, it will head towards the next resistance level at $92.50.

On the support side, the nearest support level for WTI oil is located at the 50 EMA at $87.75. If WTI oil declines below the 50 EMA, it will head towards the next support level at $86.20. A successful test of the support at $86.20 will open the way to the test of the next support at $85.

Natural Gas Rebounds After Sell-Off

Natural gas markets remain extremely volatile. Yesterday, natural gas made an attempt to settle below the support at $5.70. Today, prices have moved back above the $6.00 level.

Traders will likely have to wait for the EIA Weekly Natural Gas Storage Report, which will be released tomorrow, as the market needs additional catalysts to find direction.

Gold Tests Resistance At $1660

Gold has recently made an attempt to settle above the $1660 level as the U.S. dollar pulled back ahead of the Fed Interest Rate Decision.

Meanwhile, silver moved towards $19.80, while platinum tested resistance at $970. Palladium pulled back towards the $1850 level.

Most likely, traders will wait for the Fed decision before making big moves. In case the U.S. dollar declines after the Fed decision, precious metals will get more support. If the Fed is too hawkish, gold and other precious metals will find themselves under strong pressure.

Copper Pulls Back After An Unsuccessful Attempt To Settle Above $3.50

Copper markets made an attempt to settle above the $3.50 level but lost momentum and pulled back towards $3.45.

Copper traders will also have to wait for the Fed decision which will determine the general market sentiment for the rest of the week.

For a look at all of today’s economic events, check out our economic calendar.