On Friday, crude oil prices showed some stability after experiencing a drop overnight, which was likely due because of the US Dollar gaining ground and positive US economic data. The previous week’s jobless claims were higher than anticipated, hence Producer Price Index (PPI) numbers came in slightly lower than expected, indicating the possibility of lower consumer price pressures in the future.

This information points to support the view that the Federal Reserve will hold off on any interest rate hikes during their next meeting in June. However, the futures and overnight index swap (OIS) markets still predict a Fed rate cut in September, despite comments from the Minneapolis Federal Reserve President that CPI remains high.

The recent US Energy Information Agency (EIA) reports show that the increment in oil inventory during the week will be ending by May 5th, hence, it will be expected to go less, also the negatively impacted crude oil prices. Additionally, the White House announced plans to replenish the Strategic Petroleum Reserve (SPR) in response to inflationary pressures caused by higher energy prices due to the Russian invasion of Ukraine.

WTI crude oil prices were struggling to break the resistance at 73.93 during this week, hence it may continue to face resistance from a cluster of Simple Moving Averages (SMAs) ranging from 75.15 to 76.45. This convergence of SMAs suggests possible range trading in future terms.

On the downside, support may be found at breakpoints of 66.82, 66.12, and 64.36, or possibly even lower at prior lows of 63.64 and 62.43.

The updated crude oil chart can be found online.

If you want to further analyze the crude oil market, click here