US Debt Ceiling Outlook and WTI Oil Price Consolidation Point to Potential Upside

Following a significant rebound, West Texas Intermediate (WTI) futures on the New York Mercantile Exchange (NYMEX) experienced a minor pullback to around $72.50 per barrel. With optimism surrounding the US confirmation of raising the debt ceiling, oil prices are poised for a potential recovery.

US President Joe Biden has announced that a press conference will be held at the White House on Sunday. The White House has agreed to avoid default by not approving a breach of the debt ceiling that would not impact budgetary spending measures. Each participant in the US debt ceiling negotiations acknowledges that approving a default would be a disaster.

This alleviates concerns in the market about the potential default on bills by the US Treasury before early June, which could have had a catastrophic impact on the country's economic leadership and credibility.

Additionally, fueling the optimism among oil bulls is the catalyst that the Federal Reserve (Fed) is expected to maintain its interest rate policy unchanged in June. Amid tightening credit conditions by regional banks in the United States, market concerns about an economic downturn are crucial, and labor market conditions have started to loosen due to bleak economic prospects. Therefore, Fed Chair Jerome Powell needs to pause the tightening curse of interest rate hikes to avoid future recessions.

Meanwhile, according to Reuters, the International Energy Agency (IEA) revealed that global crude oil demand will surpass supply by 2 million barrels per day in the second half of this year, with China accounting for 60% of the oil demand growth in 2023.

On Wednesday, after unexpected growth in oil inventories for the week ending May 12th, some selling pressure was observed in oil prices. The US Energy Information Administration (EIA) reported a 5.04-million-barrel increase in oil inventories, while the market had expected a decrease of 0.92 million barrels.

WTI Crude Oil:

Overview:

Latest Price: 72.67

Intraday Change: -0.06

Intraday Change %: -0.08

Opening Price: 72.73

Trend:

20-day Moving Average: 73.33

50-day Moving Average: 74.67

100-day Moving Average: 76.34

200-day Moving Average: 80.21

Levels:

Previous Day High: 73.3

Previous Day Low: 70.06

Last Week High: 73.81

Last Week Low: 69.94

Last Month High: 83.4

Last Month Low: 73.88

Daily Chart Fibonacci Retracement 38.2%: 72.06

Daily Chart Fibonacci Retracement 61.8%: 71.3

Daily Chart Pivot Support 1: 70.76

Daily Chart Pivot Support 2: 68.79

Daily Chart Pivot Support 3: 67.52

Daily Chart Pivot Resistance 1: 74

Daily Chart Pivot Resistance 2: 75.27

Daily Chart Pivot Resistance 3: 77.24

*The provided information is for reference purposes only and should not be considered as financial advice or investment recommendation.