WTI/USD – US Crude at $54 as Markets Closed for Holiday

US crude is showing little movement in the Monday session. In North American trade, WTI crude futures are trading at the $54.04, marking a two-week high. Brent crude futures have improved to $56.18, as the Brent premium stands at $2.18. US markets are closed for  Presidents’ Day, so we can expect limited movement from crude for the remainder of the day.

Federal Chair Janet Yellen gave the US economy a thumbs-up last week. Next up is the Fed policy minutes, which will be released on Wednesday. Testifying before Congress last week, Yellen noted that inflation is moving towards the Fed’s 2 percent target, the labor market remains red-hot and consumer spending is strong. Yellen strongly hinted that a rate hike was imminent, leaving the markets to speculate if the Fed prefers to make a move in March or June. If the US economy stays on track in 2017, analysts expect two or three rate hikes of a quarter-point. At the same time, the Fed wants to take into account the economic stance of the new administration, but this remains an elusive goal. Donald Trump continues to have difficulty filling in key cabinet positions and the media continues to probe connections between Trump officials and Russia. Trump has fired back by bitterly attacking the media, and lost in the mayhem is a clear and coherent economic policy. Although Trump has been in office for just over a month, the perception of a muddled and disoriented White House is creating uncertainty in the markets, and is, as Trump would say, “bad for business”.

As more US oil rigs continue to jump into the market, US crude stockpiles continue to record sharp surpluses. Last week, Crude Oil Inventories jumped 9.5 million barrels, crushing the estimate of 3.7 million. This marked a sixth straight surplus, all of which beat their estimates.  The Energy Information Administration has projected that US production in 2017 will be the highest since 1970. This surge in US drilling could spell trouble for OPEC and Russia, which recently signed an agreement to lower production, in the hope of raising prices. The OPEC agreement came into effect on January 1, and analysts have noted that compliance with production cuts is at a record 90 percent. Despite these impressive numbers, US crude is slightly lower since the agreement took effect.

WTI/USD Fundamentals

Monday (February 20)

  • There are no US releases on the schedule

 

WTI/USD for Monday, February 20, 2017

WTI/USD February 20 at 11:15 EST

Open: 53.83 High: 54.24 Low: 53.73 Close: 54.04

WTI USD Technical

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

WTI/USD has showed limited movement in the Monday session, remaining close to the $54 level.

  • 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

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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