FX.co ★ CL/Crude Oil

The price of US benchmark West Texas Intermediate (WTI) crude oil rebounded after a surprise drop in US crude oil inventories. This decline, reported by the U.S. Energy Information Administration, signaled potentially increasing demand and pushed WTI prices back up to around $78.95 on Thursday. Lower oil inventories typically indicate higher demand, which can drive prices higher. Geopolitical tensions in the Middle East, particularly the ongoing conflict between Israel and Hamas, can also impact WTI prices. The United States hopes that ongoing discussions on a ceasefire will help narrow the differences between the two sides. Easing tensions could potentially lead to lower oil prices. However, other factors are also at play. Recent hawkish comments from Federal Reserve officials regarding keeping interest rates higher for longer have strengthened the US dollar. Since oil is priced in dollars, a stronger dollar can limit the upside potential for WTI prices.

The upcoming OPEC+ meeting on June 1st, where the Organization of the Petroleum Exporting Countries and its allies will discuss production policy, is another key factor to watch. While there have been no recent discussions on increasing oil supplies, this decision could significantly impact prices. Technically, WTI futures recently fell to a two-month low after failing to surpass a key resistance level. If prices fall further, they could encounter support at various technical levels, potentially leading to a rebound. However, a significant sell-off is also possible if support breaks. Overall, the price of WTI crude oil is being influenced by a combination of factors, including inventory levels, geopolitical tensions, the US dollar, and upcoming OPEC+ decisions. The interplay of these forces will determine the future direction of WTI prices.