WTI oil price falls on profit taking from new multi-month high

WTI oil price pulls back from new 4 ½ month high ($83.10), down 1.6% for the day so far, as traders collected profits ahead of Fed policy announcement.

The oil price accelerated higher recently on fresh concerns about oil supply, following attacks on Russian refining installations and persisting threats of stronger disruptions.

Stronger than expected drop in crude inventories (API report) and lower build in crude stocks compared to the previous week (EIA report) contributes to signals of a healthy demand, with improving economic data from the world’s largest oil importer China, adding to supportive factors.

From the technical point of view, oil price continues to move within a larger uptrend from $67.70 (Dec 2023 low), with daily studies being firmly bullish, but overbought, which sparked the latest sell-off.

Pullback is likely to be a shallow and ideally to be contained by psychological $80.00 support, reinforced by rising 10DMA, though deeper drop cannot be ruled out, with extended dips to find ground above $78.63/43 (Fibo 38.2% of $71.40/$83.10 / 200DMA respectively) to mark a healthy correction and keep larger bulls in play.

Res: 82.63; 83.10; 83.58; 84.57
Sup: 80.34; 80.00; 79.15; 78.63