Crude Oil Flies High with Markets Eyeing a Fed Pause. Will WTI Go Higher?
Key Topics: Crude, USD, Jobs, Fed, Stocks, Central Banks, ASEAN, G-20
The price of unrefined oil is maintaining high levels as we enter a new week of trading, following the recent surge on Friday, bolstered by positive news about the US job market.
The WTI futures agreement reached its highest point in 10 months, hitting US$ 86.09, while the Brent agreement surpassed US$ 89, marking its first rise since January.
The fragile market was made worse by the news of production cuts from Saudi Arabia and Russia, which came after the surprising decrease in US inventory data from last week.
The blog post last week informed readers that the API inventory report indicated a reduction of 11.486 million barrels. Similarly, the US Energy Information Agency's weekly petroleum status report displayed a significant decline of 10.584 million barrels.
Friday's employment report in the United States was generally viewed in a positive light, as it revealed more job creations than expected. However, there was a slight increase in the unemployment rate.
This occurred because more people got involved and there were some adjustments to previous data that showed lower numbers. Ultimately, it is now widely predicted that the Federal Reserve will keep interest rates steady at its upcoming meeting of the Federal Open Market Committee (FOMC).
Today is Labour Day in the US, and as a result, Treasury markets are not operating. However, bond futures indicate a slight increase in yields. Similarly, Canada is also observing the Labour Day holiday.
The American currency has remained relatively stable today, with some slight decline. In contrast, the stock markets in the Asia-Pacific region have experienced a positive day.
Out of the major indicators, the Hang Seng Index (HSI) of Hong Kong has taken the lead, experiencing a significant increase of more than 2.5% on the current day.
The metal market is once again steady following substantial increases last week. The current trading price for spot gold remains close to US$ 1,940 per ounce.
Looking forward to the upcoming week, the Reserve Bank of Australia (RBA) and the Bank of Canada are slated to announce their decisions regarding interest rates on Tuesday and Wednesday, correspondingly.
The ASEAN conference in Jakarta will commence tomorrow, while the G-20 meeting is scheduled to kick off later this week in New Delhi.
Seven officials from the Federal Reserve are scheduled to share their perspectives openly during the course of the week. However, in the nearer timeframe, there will be a speech by Christine Lagarde, the President of the European Central Bank, later today.
You can access the complete economic calendar by following this link.
Snapshot Of WTI Crude Oil Analysis
The WTI futures agreement has experienced a slight decrease today following an impressive surge last week, surpassing the previous highest point in mid-August and trading as high as 86.09.
Resistance levels may be encountered either at the pivotal point of 90.39 or in the vicinity of the two high peaks at 93.74.
Moving ahead, there exists a crucial level where a halt in price movement is expected, along with a previous lower point and the 55-day simple moving average (SMA) within the vicinity of 77.30 to 77.50. This particular area could potentially serve as a region of support.
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Graph generated using TradingView
--- Authored by Daniel McCarthy, Strategist for DailyFX.com
For any inquiries, feel free to get in touch with Daniel through his Twitter handle, @DanMcCarthyFX.
DailyFX offers updates on forex-related news and conducts technical analysis on the factors that impact the worldwide currency markets.
