West Texas Crude Steady at $54 on Mixed Durable Goods Reports

West Texas crude is showing little movement in the Monday session. In North American trade, WTI crude futures are trading at $54.21. Brent crude futures are trading quietly at $56.13, as the Brent premium stands at $1.92. On the release front, it was a mixed day for US data. Core Durable Goods Orders declined 0.2%, short of the estimate of +0.5%. However, Durable Goods Orders jumped 1.8%, beating the forecast of 1.6%. Pending Home Sales disappointed with a sharp drop of 2.8%, compared to the estimate of a 1.1% gain. On Tuesday, the US publishes Preliminary GDP and CB Consumer Confidence. As well, President Trump will address a joint session of Congress.

US numbers were soft on Friday. Revised UoM Consumer Sentiment dropped to 96.3 in February, compared to 98.5 a month earlier. Still, this figure edged above the forecast of 96.1. On the housing sector, New Home Sales improved to 555 thousand in January, but this was well short of the forecast of 575 thousand. This follows Existing Home Sales, which jumped to 5.69 million, above the estimate of 5.55 million.

Donald Trump can check off his first month in office, but it has been anything but smooth sailing. The new president has been involved in constant sparring with the media and continues to struggle trying to fill key cabinet positions. Trump will address Congress on Tuesday and the nation will be listening closely. Will we see the combative, outspoken Trump, or will he opt to tone it down and act in a conciliatory manner? In order to pass key legislation, Trump will have to make nice with lawmakers from both sides of the fence, and this speech would be an ideal time to offer a hand of cooperation rather than combat. The markets will be looking for some details about the administration’s economic plan – if Trump fails to deliver, market sentiment could sour, dragging down the US dollar.

WTI crude continues to stay close to the $54 level, following a bullish Crude Oil Inventories release on Thursday. The weekly indicator posted a seventh consecutive surplus, but the reading of 0.6 million barrels was much smaller than expected and marked the second weakest reading in 2017. This was in sharp contrast to the previous reading of 9.5 million. The string of surpluses underscore a sharp increase in US shale drilling, which threatens to offset the recent OPEC-Russia agreement to lower production and thus raise oil prices. The OPEC-Russia deal came into effect on January 1, and although compliance has been very high, oil prices have risen only marginally since the start of the year.

WTI/USD Fundamentals

Monday (February 27)

  • 8:30 US Core Durable Goods Orders. Estimate +0.5%. Actual -0.2%
  • 8:30 US Durable Goods Orders. Estimate 1.6%. Actual 1.8%
  • 10:00 US Pending Home Sales. Estimate 1.1%. Actual -2.8%
  • 11:00 US FOMC Member Robert Kaplan Speech

Tuesday (February 28)

  • 8:30 US Preliminary GDP. Estimate 2.1%
  • 10:00 US CB Consumer Confidence. Estimate 111.1

*All release times are GMT

*Key events are in bold

WTI/USD for Monday, February 27, 2017

WTI/USD February 27 at 12:00 EST

Open: 54.03 High: 54.60 Low: 53.98 Close: 54.21

WTI USD Technical

S3 S2 S1 R1 R2 R3
40.57 46.54 52.22 58.32 65.05 72.99

WTI/USD posted small gains in the Asian and European session. The pair has edged lower in North American trade

  • 52.22 remains a weak support level
  • 58.32 is the next resistance line
  • Current range: 52.22 to 58.32

Further levels in both directions:

  • Below: 52.22, 46.54, 40.57 and 33.22
  • Above: 58.32, 65.05 and 72.99

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.