WTI crude futures fall 0.8% on Wednesday towards $64 a barrel

WTI crude futures fall 0.8% on Wednesday towards $64 a barrel

Oil pulled back from recent multi-year highs after technical indicators showed crude rallied too far too fast.  

Futures in New York fell toward $64 a barrel on Tuesday in choppy trading, following a surge Monday to the highest intraday level since 2018 after an attack on a major Saudi Arabian crude export terminal. Prices rose above the Upper Bollinger band during the last three sessions, signalling a pullback was in store.  

While a technical dip was expected in the short-term, OPEC+ output cuts are seen holding the market over until demand comes back in force. Standard Chartered Plc said the producer group’s supply restraint will likely even overtighten the market. Still, concerns remain over how much higher prices can go without destroying demand. India would prefer oil to be on the lower side in the range of $50 a barrel to $60 a barrel, according to Mukesh Kumar Surana, chairman of Hindustan Petroleum Corp., one of the nation’s biggest refiners. 

The EIA outlook also said crude prices should decline next year, with “global oil supply surpassing oil demand during the second half of 2021.” While the agency raised its Brent price forecast to $58.51 a barrel in 2022, it sees the benchmark falling from a 2021 average of $60.67 a barrel. 

Today’s Event 

Despite the dip this week, crude is expected to resume its upward trend, which may encourage more activity from U.S. drillers.  Keep an eye on USD forex pairs today for an opportunity to trade! 

  • 17.30 – US – Crude Oil Inventories  

Potential instruments to Trade: USD Crosses.  

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