Crude Oil Outlook: Oil Prices Rise as Inflation Jitters Loom
Teaser: Oil prices continue to rise as fundamental factors weigh on supply. Rising channel continues to hold bulls at bay
Oil Forecast: Neutral
- Crude oil prices extend gains as supply constraints remain in tact
- US Crude (WTI) climbs to two week high after an unexpected decrease in inventories
- Brent crude remains around $86.00
Following the release of the latest API (American Petroleum Institute) report, an unexpected decline of 2.5 million barrels of oil has allowed bulls to drive prices higher.
This comes after the recent decision by OPEC+ (Organization of the Petroleum Exporting Countries and allies) to continue limiting supply to 400,000 barrels per day despite soaring prices.
With supply constraints currently supporting energy prices, inflation data from China earlier today came in higher than expected, bringing the US CPI data to the forefront of risk sentiment.
Oil – US Crude (WTI) Price Action
After pricing in the fundamental factors which remain at the forefront of risk sentiment, oil prices may likely continue to sustain the upward trajectory, at least for now.
If bulls are able to push through the key level of resistance at $85, a breakout towards $90.00 may be in the cards. However, fears of higher wage inflation and increased production could result in a resumption of the bear trend and a possible retest of psychological support at $80.00.
US Crude Oil (WTI) Daily Chart
Chart prepared by Tammy Da Costa using TradingView
--- Written by Tammy Da Costa, Analyst for DailyFX.com
Contact and follow Tammy on Twitter: @Tams707
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.