MAs Turn into Support for Crude Oil, As Tensions Remain High - FX Leaders

Crude Oil has been showing significant volatility this month. WTI oil opened higher earlier in October, with a bullish gap of $2.50, following the tensions in the Middle East. The price continued to rise that day, but the 200 SMA (purple) turned into resistance on the daily chart, stopping the climb higher.

Then the 100 SMA (green) turned into resistance, although the lows were getting higher which was a strong bullish sign. Last week the major buildup in the US EIA inventories didn’t have much effect though, as five weeks’ worth of drawdowns in US crude Oil supply were eliminated by the sharp increase in stocks. Data supporting the idea that US Oil production was at an all-time high were presented with it as well.

Due to the ongoing earnings season and the anticipated expiration of October month futures contracts, we anticipate further high volatility throughout this week’s holiday-shortened session. The Israel-Palestine issue will continue to serve as a source of market signals. It is advisable to monitor the profits of significant Indian corporations. The US GDP, UK services PMI, US manufacturing and services PMI, US first jobless claims, and crude Oil inventories are just a few of the significant local and international events that will be highlighted. We continue to keep a bullish bias at the moment, as long as tensions remain high in the Middle East, and will try to buy retraces lower in US WTI crude.

US EIA Weekly Crude Oil Inventories

• EIA weekly US oil inventories -4,491K vs -300K expected
• Prior week EIA inventory was +10,176K
• Gasoline -2,371K vs -1,097K expected
• Distillates -3,185K vs -1,360K expected
• Refinery utilization +0.4% vs -% expected
• Implied mogas demand 8.94m vs 8.58m prior
• Domestic production 13.2 mbpd vs 13.2 mbpd prior

This is bullish and distillate inventories were particularly tight.

The API Report the Previous Day

• Crude Oil -4383K
• Gasoline -1578K
• Distillates -612K
• Cushing -10005K

US WTI Crude Oil Live Chart

WTI

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2023-10-23 09:46:28Z
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