Fed Interest Rate
As US Federal Reserve (Fed) Chairman Jerome Powell takes the podium later today, the US Dollar (USD) is facing a crucial moment. The stakes are very high even though no increases are anticipated. Recent data not only revealed an increase in economic activity and a robust labour market, but also that inflationary pressures are beginning to pick up steam, in part because of rising oil costs.
Oil Technical Analysis
This Wednesday morning, the price of oil is declining. Since the API numbers have declined, some traders have noticed some profit-taking. You would imagine there is more upside potential to come.
On the plus side, the level to surpass is still the $93.12 double top from October through November of last year. Although this appears to be very much within reach, markets have already factored in a significant amount of potential supply shortages and positive expectations. If $93.12 is taken out, the high for August 2022 will be $97.11.
Oil Price Drivers
Like all assets, the price of WTI Oil is primarily influenced by supply and demand. As a result, higher demand might be driven by worldwide growth and vice versa for weak global growth. War, sanctions, and political unrest all have the potential to alter supply and raise costs. The decisions made by OPEC, a large collection of nations that produce oil, are another important factor in price. Since WTI Crude Oil is mostly traded in US Dollars, the value of the US Dollar has an impact on the price of the commodity. A weaker US Dollar might make oil more inexpensive, and vice versa.