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17 Dec 2014
WTI Crude erases gains as strong US dollar weighs
FXStreet (Mumbai) - Crude prices in the US erased gains as the US dollar strengthened sharply against the basket of currencies post the Federal Reserve (Fed) policy statement.
WTI Crude for February delivery now trades largely unchanged at USD 56.29/barrel, down from a high of USD 59.15/barrel hit ahead of the Fed event. Earlier today, the sharp spike in Crude from the low of USD 54.61 caught markets by surprise. Analysts say the spike may have been due to short covering as we head into the year end. Moreover, with With OPEC ministers saying this week they are in no hurry to cut output, the bounce may have been triggered by the oversold technical studies.
Meanwhile, the commodity erased gains post Fed event tracking the US dollar, which now trades 1.4% higher at 89.30 levels. The fall also erased gains that were driven by a drop in stockpiles reported by the Energy Information Administration (EIA) earlier today. Crude oil inventories dropped by 0.85 million barrels in the week ended December 12, while analysts expected a decline of 2.36 million barrels.
WTI Crude Technical Levels
Crude has an immediate support located at 56.26 (Dec. 15 low), under which a major support is seen at the 50-DMA located at 55.74. Meanwhile, resistance is seen at 57.42 and 59.15 levels.
WTI Crude for February delivery now trades largely unchanged at USD 56.29/barrel, down from a high of USD 59.15/barrel hit ahead of the Fed event. Earlier today, the sharp spike in Crude from the low of USD 54.61 caught markets by surprise. Analysts say the spike may have been due to short covering as we head into the year end. Moreover, with With OPEC ministers saying this week they are in no hurry to cut output, the bounce may have been triggered by the oversold technical studies.
Meanwhile, the commodity erased gains post Fed event tracking the US dollar, which now trades 1.4% higher at 89.30 levels. The fall also erased gains that were driven by a drop in stockpiles reported by the Energy Information Administration (EIA) earlier today. Crude oil inventories dropped by 0.85 million barrels in the week ended December 12, while analysts expected a decline of 2.36 million barrels.
WTI Crude Technical Levels
Crude has an immediate support located at 56.26 (Dec. 15 low), under which a major support is seen at the 50-DMA located at 55.74. Meanwhile, resistance is seen at 57.42 and 59.15 levels.