Crude Oil Price Outlook: US GDP Eyed Post Dovish Fed, OPEC+ and Indian Covid Surge
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Crude Oil, WTI, EIA, Fed, India, US First Quarter GDP - Talking Points:
- Crude oil prices pushed higher, trimmed gains after EIA report
- Dovish Fed may boost gains ahead of key first-quarter US GDP
- WTI prices may be aiming to revisit March peak, but path bumpy
Crude oil prices aimed higher over the past 24 hours, developing most of the push during Wednesday’s European trading hours. Prices then trimmed some upside progress after EIA inventory data showed oil stockpiles rising by 90k barrels. Economists were estimating a -60k drawdown instead.
The commodity then seesawed around the Federal Reserve’s latest monetary policy announcement. There, the central bank reiterated its dovish stance despite rising near-term inflationary pressures. Fed Chair Jerome Powell stressed that the central bank views these gains as a transitory effect.
Market sentiment picked up pace during Thursday’s Asia-Pacific trading session, adding upward momentum to WTI. But, it should be noted that the commodity faces some obstacles. For one thing, OPEC+ members agreed to gradually restore output, boosting supply by about 2 million barrels per day in the coming months.
Meanwhile, surging Covid cases and deaths in India, the world’s third-largest consumer of oil, likely weighed on energy prices. The nation reported a grim 3.6k fatalities over the past 24 hours as coronavirus cases climbed by almost 380k.
Over the remaining 24 hours, crude oil is eyeing first-quarter US GDP data. Preliminary estimates point to a growth rate of 6.6% q/q, up from 4.3% prior. Given the dovish Fed, a stronger-than-expected print may further bolster market sentiment. That may in turn spill over into energy prices.
Crude Oil Technical Analysis
WTI crude oil futures appear to be aiming for a retest of the March peak. This followed a bounce off the key 57.27 – 58.60 support zone. The 20-day and 50-day Simple Moving Averages appear to be maintaining the upside focus. Those may come into play in the event of a near-term turn lower.
WTI Futures Daily Chart
--- Written by Daniel Dubrovsky, Strategist for DailyFX.com
To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.