• XAU
    2010.5 USD 0.48%
  • XCU
    3.73 USD -1.34%
  • XPD
    1478 USD -0.78%
  • XPT
    1048 USD 0.64%
  • ALU
    2243.47 USD -2.23%
  • RICE
    18 USD -1.75%
    74.17 USD -1.32%
    14.35 USD -0.66%
  • NG
    2.27 USD 0.27%
    256.22 USD -1.15%
    70.04 USD -2.02%
  • XAG
    23.96 USD -0.14%

Oil trades lower as new data hit the market

WTI oil headed lower today as a combination of negative news undermined the commodity.

WTI drops after SPR sells, balanced OPEC outlook

The US oil benchmark – West Texas Intermediate – declined 2% on Tuesday, falling back below the psychological level of $80. Short-term fundamentals worsened for the commodity.

This was the result of a US government’s announcement late Monday. The aim is to sell an additional 26 million barrels of petroleum from the Strategic Petroleum Reserve (SPR) as part of a congressionally required release.

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Last year, the Energy Department released a record 180 million barrels from the reserve to counteract increasing gasoline costs. These factors have reduced SPR supplies to around 372 million barrels, the lowest level since 1983.

OPEC estimates boosted demand

Elsewhere, the Organization of the Petroleum Exporting Countries (OPEC) increased its oil demand prediction for 2023 by 100,000 barrels per day in a monthly report, citing the reopening of the Chinese economy following COVID restrictions.

Furthermore, the Organization of Petroleum Exporting Countries increased its forecast for the quantity of crude oil it will need to flow this year by 250,000 barrels per day, to an average of 29.42 million barrels per day. Based on OPEC’s current output levels, this year’s markets are expected to be roughly balanced.

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However, Russia has already indicated that it will reduce output by 500,000 barrels per day beginning in March. Therefore, it is doubtful that OPEC members will increase production to compensate for Russia’s reductions.

“We believe two-thirds of the growth in oil demand this year will come from emerging Asia, led by China’s reopening – which we think will lift global oil demand to above 103 million barrels per day in the year’s second half. Thus, we maintain our positive outlook on oil as we expect Brent to rise to $110 and WTI to $107 this year,” UBS analytics team.

Finally, supply fears also diminished. The Energy Information Administration projected record March production from the seven largest US refineries.

US inflation continues to be elevated

Earlier today, the official month-over-month data for the US Consumer Price Index was 0.4%, which was in line with estimates of 0.4%. Meanwhile, the US CPI for the year in January came in at 6.4% compared to the 6.2% predicted. As a result, derivatives markets are now putting in a top for the Fed rate between 5% and 5.25% for July.

Oil remains stuck below the key resistance of $82 and above the support of $76. As long it continues to be between these two essential barriers, sideways trading can continue.


WTI 1D chart, source:, author’s analysis

Tomáš is a financial reporter with US markets as his main field. Tomáš is an aspiring author and entrepreneur aspiring to help people get better in financial knowledge.


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