Fundamental analysis of WTI

WTI rose to 76 USD per barrel for the first time since May, holding around 75.70 USD during the day. The rise in WTI oil prices was mainly due to the weakening of the US dollar on Wednesday. 

 The U.S. Bureau of Labor Statistics reported that the consumer price index declined 3% year-on-year in June, down from 4% in May. That pushed the U.S. dollar index to a one-year low of 100.50. Concerns about central bank rate hikes, a slowing economy and lower oil demand prevail, but the latest inflation data suggests that the July 25-26 meeting will announce that the Fed will not raise rates for the rest of the year, further weakening the U.S. dollar. 

 The slowdown in China is a cause for concern, as evidenced by disappointing consumer price index and producer price index (PPI) data for June. In addition, geopolitical tensions persist. Tensions between the US and China are expected to limit the rise in crude oil prices. However, there is some optimism about China's willingness to meet with the US to repair relations. 

 WTI's rise was also helped by Saudi Arabia extending its voluntary 1 million bpd oil supply cut for two months through August, bringing Saudi oil production to its lowest level in years. In addition, China's record oil imports rose 45.3% year-on-year in June, boosting market optimism and easing fears of a global economic recession. However, challenges remain, including slowing global economic growth, slowing global trade and investment, and geopolitical risks. In addition, according to the U.S. Energy Information Administration, U.S. crude oil inventories unexpectedly rose by nearly 6 million barrels, dampening the upward momentum in oil prices. 

 Going forward, the producer price index (PPI) and preliminary consumer sentiment data from the University of Michigan for July could have a significant impact on the trajectory of WTI prices. Therefore, market participants are keeping a close eye on these factors to identify potential opportunities in the oil market.

Technical Analysis and Scenarios:

WTI crude oil is currently trading at around 75.70, near the upper boundary of the Bollinger Band (76.40). The widening of the Bollinger Bands and the indicator's upward trajectory indicate an increase in volatility and bullish sentiment in the market. Moreover, the price action seems to be in a consolidation phase near the upper band, indicating the possibility of further upward movement. However, one should also consider the nearby support and resistance levels, which are crucial in predicting further price action.

Main scenario (BUY)

Recommended entry level: 74.90.

Take Profit: 80.00.

Stop Loss: 73.50.

Alternative scenario (SELL)

Recommended entry level: 74.90.

Take Profit: 73.50.

Stop loss: 75.70.