West Texas Crude Close to November Lows on Oversupply Concerns

West Texas crude has dipped below the $48 level on Monday. In the North American session, WTI crude futures are trading at $47.69. Brent Crude futures are trading at $50.90, as the Brent premium stands at $2.21. On the release front, there are no economic indicators in the US. We’ll hear from two FOMC members – Charles Evans and Robert Kaplan. There are no US indicators until Tuesday, with the release of CB Consumer Confidence.

WTI crude has dropped to a low of $47.08 on Monday, close to its lowest level since the end of November. Crude has remained under pressure since last week’s Crude Oil Inventories, which posted a strong surplus of 5.0 million barrels, well above expectations. The weekly indicator has recorded only two declines in 2017, as US oil drillers continue to enter the market and ratchet up US oil production. This, together with increased US shale production, has more than offset OPEC’s production cuts. Last week, OPEC announced it was considering extending the production cut agreement by another 6 months, until the end of 2017.

Donald Trump’s stunning ascendancy to the presidency last November triggered an impressive rally by the US dollar. However, market euphoria over Trump’s election win is long past. The inquiry into the Trump administration’s links with Russia continues to make headlines, and is another cause for concern for nervous investors. Trump has been in office for over two months, but he has yet to provide any details over even an outline of economic policy. Last week, Trump’s proposed bill to change Obamacare was not even voted on, as the White House could not garner enough support to pass the bill. This latest setback for the beleaguered Trump administration could increase market jitters and send the US dollar to lower levels.

Week Ahead Trump Administration Fails with Healthcare Bill

Trumps Road to 100 Days of Inaction Rattles Markets

WTI/USD Fundamentals

Monday (March 27)

  • 17:15 US FOMC Member Charles Evans Speech
  • 22:30 US FOMC Robert Kaplan Speech

Upcoming Key Events

Tuesday (March 28)

  • 14:00 US CB Consumer Confidence. Estimate 113.9

*All release times are GMT

*Key events are in bold

 

WTI/USD for Monday, March 27, 2017

WTI/USD March 27 at 12:15 EST

Open: 48.12 High: 48.13 Low: 47.08 Close: 47.69

 

WTI USD Technical

S3 S2 S1 R1 R2 R3
33.22 40.57 46.54 52.22 58.32 65.05

WTI/USD showed little movement in the Asian and European sessions. The pair is choppy in North American trade

  • 46.54 is providing weak support
  • 52.22 is the next resistance line
  • Current range: 46.54 to 52.22

Further levels in both directions:

  • Below: 46.54, 40.57 and 33.22
  • Above: 52.22, 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.