WTI Fundamental Analysis

A quick look at economic developments:

U.S. inflation continues to rise, reaching 4.7% y/y in May 2023, above market expectations. This could cause the dollar to strengthen, which in turn could put pressure on oil prices.

OPEC+ Oil Production Increase: The oil cartel and the countries that adhered to the agreement decided to increase oil production by 2 million barrels per day starting in June. This may lead to an increase in supply on the market and lower oil prices.

Growing oil demand in China: China, the world's largest oil importer, continues to increase oil imports, which could support oil prices.

US economic recovery: Latest US employment data shows improvement in the labor market, which may boost economic activity and increase demand for oil in the country.

U.S. oil inventory growth: Latest EIA report showed a 1.7mb crude oil inventory increase, which may weigh on oil prices.

The impact of macroeconomic statistics:

Today's data on China's economy shows a decline in exports and imports, which may indicate a slowdown in economic activity in the country. This may put pressure on oil prices as China is one of the largest oil consumers in the world.

In the U.S., data on exports and imports as well as the trade balance is expected today. If data turns out to be lower than expected, it may lead to dollar appreciation which may also put pressure on oil prices.

In addition, Cushing crude oil inventories and excess crude oil inventories will be released today. If inventories are higher than expected, it could cause oil prices to fall due to increased supply in the market.

Technical analysis and scenarios:

Key levels:

Support levels: 67.080, 68.140, 69.390, 70.590

Resistance levels: 71.785, 73.080, 74.500, 75.840, 76.950

Main scenario: if the price holds above Tenkan-sen, it may continue rising towards the resistance level of 73.080. In this case, we can consider buying with a target at 73.080 (take profit) and fixing losses at 70.590 (stop loss).

Alternative scenario: If the price falls below Tenkan-sen, it may continue to decline to the support level of 70.590. In this case, we could consider selling with a target at 70.590 (take profit) and closing losses at 73.080 (stop loss).