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WTI Crude Oil Market Update

3/15/2023 11:25 AM

After a confident decline at the beginning of the week, which led to the renewal of local lows from December 12, today during the Asian session, the price of WTI Crude Oil is correcting, testing 72.50 with the support of technical factors.

The asset is under pressure from growing concerns about the state of the US and global economies: the bankruptcy of three large US banks indicated the vulnerability of the financial system in the face of tightening monetary policy and ongoing market uncertainty. However, the Treasury Department announced the launch of an emergency financing program for lending institutions, supporting depositors and assuring that all deposits held in the accounts of closed institutions will be returned to the owners, although most of the savings in Silicon Valley Bank (SVB) exceeded the insurance threshold.

The European authorities intend to further adjust the current price limit for Russian oil products at 100.0 dollars per barrel, which came into force on February, 5: in particular, the possibility of a 5.0 dollars reduction from the average market indicators is being considered. The initiative is currently being submitted to the International Energy Agency (IEA) to assess the impact of the likely adjustment on the market.

Additional pressure on quotes on Tuesday was provided by data on oil stocks in warehouses in the US. Thus, according to the report of the American Petroleum Institute (API), the figure for the week of March 10 increased by 1.155M barrels after a decrease of 3.835M barrels earlier. On Wednesday, the market awaits the publication of final statistics on stocks from the Energy Information Administration of the US Department of Energy (EIA): forecasts suggest an increase in the value of 0.555M barrels after a decrease of 1.694M barrels last week.

On the daily chart, Bollinger bands are moderately declining: the price range is actively expanding but not as fast as the "bearish" sentiment develops. The MACD indicator falls, keeping a strong sell signal (the histogram is below the signal line). Stochastic is consolidating near “20”, indicating that the instrument may become oversold in the ultra-short term.

Resistance levels: 73.00, 74.00, 76.00, 78.00. | Support levels: 71.00, 70.00, 68.15, 67.00.

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