News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bullish
Oil - US Crude
Bullish
Wall Street
Bearish
Gold
Mixed
GBP/USD
Bearish
USD/JPY
Bearish
More View more
Notice

BoE Chief Econimist (Hawk) is to Step Down From BoE After June Meeting

Real Time News
  • Forex Update: As of 20:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.36% 🇪🇺EUR: 0.32% 🇯🇵JPY: 0.30% 🇨🇦CAD: 0.23% 🇨🇭CHF: 0.17% 🇬🇧GBP: 0.06% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/hUCfi54zxT
  • RT @mattleising: BN 13:49 *COINBASE DIRECT LISTING REFERENCE PRICE SET AT $250: NASDAQ
  • When is Kodak going to get into the SPAC game? Bitcoin mining pivot in 2018 and Vaccine production pivot in July 2020. Any day now...
  • Commodities Update: As of 20:00, these are your best and worst performers based on the London trading schedule: Silver: 2.19% Gold: 0.74% Oil - US Crude: 0.34% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/QNPEEysdEK
  • The Dow Jones, Nasdaq 100 and S&P 500 will look to the arrival of earnings season for influence. Get your #equities market update from @PeterHanksFX here:https://t.co/96vOGDYq2K https://t.co/xUE3PxGz9B
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 92.41%, while traders in France 40 are at opposite extremes with 75.87%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/akuL5mmcvW
  • Pfizer states it can deliver 10% more vaccine doses to the US by the end of May $PFE $SPX $NDX $RUT
  • Had the pleasure of sitting down with @GuyAdami and @RiskReversal for another episode of The Macro Setup to discuss $GLD $BTC and $SPX ahead of earnings season and the Coinbase IPO Watch here - https://t.co/6usEdkA5om
  • Indices Update: As of 20:00, these are your best and worst performers based on the London trading schedule: France 40: 0.41% Germany 30: 0.06% Wall Street: 0.00% FTSE 100: 0.00% US 500: -0.01% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/0qT3sH7l3i
  • #Bitcoin breaks out to fresh all-time highs as investors cast an eye to the long awaited Coinbase IPO #BTC $BTCUSD https://t.co/qwxlzkGa9C
Crude Oil Prices May Rise if Stockpiles Fall, FOMC Meeting Eyed

Crude Oil Prices May Rise if Stockpiles Fall, FOMC Meeting Eyed

Margaret Yang, CFA, Strategist

CRUDE OIL PRICE OUTLOOK:

  • API reported a surprise draw in inventories, which may help to underpin oil prices
  • WTI hovered near US$ 64.7 ahead of the FOMC meeting, with the US Dollar closely watched
  • Reflation and stimulus hopes have largely been baked in, rendering oil prices susceptible to a technical pullback should the central bank deliver a hawkish-biased message
Oil Forecast
Oil Forecast
Recommended by Margaret Yang, CFA
Get Your Free Oil Forecast
Get My Guide

Crude oil prices were little changed during Wednesday’s APAC session as traders await fresh catalysts from the upcoming FOMC meeting. The American Petroleum Institute (API) reported a surprise draw in crude inventories of 1.05 million barrels for the week ending March 12th, compared to a baseline forecast of a 2.7-million-barrel build. This suggests that demand is picking up at a faster-than-expected pace as refineries resume operating after February’s cold blast.

Previously, data released by the Energy Information Administration (EIA) pointed to a large inventory build over the prior two weeks as extreme weather dented refinery capacity. The EIA will release the latest weekly data today, in which markets foresee a 2.7-million-barrel increase in stockpiles after a 13.80-million-barrel risepreviously.

Crude Oil Prices May Rise if Stockpiles Fall, FOMC Meeting Eyed

Source: Bloomberg, DailyFX

While falling stockpiles may be perceived to underpin oil prices, traders were largely staying on the sideline waiting for the Federal Reserve to paint a clearer picture of economic and monetary policy outlook later today. The US Dollar index (DXY) edged higher for a fourth day, reflecting a cautious note from investors as fears of a ‘taper tantrum’ escalated recently. Although many expect the Fed to keep the policy rate and asset purchasing program unchanged for the time being, a clear improvement in job market conditions and the economic outlook may lead to changes in the dot plot to reflect a faster pace of recovery.

The US Dollar and crude oil prices have tended to exhibit a negative relationship, with their past 12-month correlation coefficient standing at -0.818 (chart below). Should the Fed deliver a hawkish-biased message and boost the US Dollar, oil prices will probably see a deeper pullback.

Crude Oil Prices May Rise if Stockpiles Fall, FOMC Meeting Eyed

Source: Bloomberg, DailyFX

WTI has surged more than 80% from early November, backed by reflation hopes, stimulus efforts and a prompt rollout of vaccines around the globe. Restraint by OPEC+ and its allies in production hikes has further strengthened the oil price outlook alongside demand optimism. A magnificent 4-month rally, however, renders oil prices susceptible to technical pullbacks as the bullish drivers appear to have been baked-in already.

Introduction to Forex News Trading
Introduction to Forex News Trading
Recommended by Margaret Yang, CFA
What does it take to trade around data?
Get My Guide

Technically, WTI retreated from the 200% Fibonacci extension level of 66.50 and entered a minor correction. The overall trend remains bullish and is well-supported by the 20-day Simple Moving Average (SMA) line. A daily close below the 20-day SMA (63.06) would likely intensify near-term selling pressure and carve a path for price to test a key support level at 62.19 (the 161.8% Fibonacci extension). The MACD indicator is diverging from prices movements, pointing to a weakening upward momentum.

WTI Crude Oil PriceDaily Chart

Crude Oil Prices May Rise if Stockpiles Fall, FOMC Meeting Eyed
Building Confidence in Trading
Building Confidence in Trading
Recommended by Margaret Yang, CFA
Don’t give into despair, make a game plan
Get My Guide

--- Written by Margaret Yang, Strategist for DailyFX.com

To contact Margaret, use the Comments section below or @margaretyjy on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES