Oil unable to capitalise on uptick in Chinese recovery data

• WTI Oil trades in the red after a volatile session on Tuesday.
• The US Dollar is trading in another universe after a substantial devaluation. 
• Oil upticks are still to be factored in, while the overall downside is the most probable outcome.

Oil prices are in the red again after crude briefly tried to break $80.00 on Tuesday. The drop in US inflation numbers trembled the markets and saw equities and bond prices soaring substantially higher. Oil traders this Thursday will for sure be asking themselves if Crude prices cannot rally on the  Fed being done hiking, and Chinese economic data overnight pointing to a quicker-than-expected recovery, then what will? 

Meanwhile, the US Dollar (USD) has undergone its biggest intraday devaluation in over 52 weeks. The US Dollar Index (DXY) dropped by more than 1.5% intraday. With the markets now going all-in on the idea that the US Federal Reserve is done hiking, demand in the economy should pick up from now. 

Crude Oil (WTI) trades at $77.80 per barrel, and Brent Oil trades at $82.00 per barrel at the time of writing. 

Oil news and market movers: markets not scared of extensions

• Later this Wednesday all eyes will be on San Francisco, where US President Joe Biden and Chinese President Xi Jinping are meeting.
• The US Energy department confirmed it bought near 1.2 million barrels from two companies in order to refill the Strategic Petroleum Reserve. 
• Overnight, the American Petroleum Institute (API) revealed a build of inventories by 1.3 million barrels last week. 
• Around 15:30 GMT, the Energy Information Agency (EIA) is due to release its weekly EIA Crude Oil Stocks Change. Expectations are for a drawdown of 300,000, where last week saw a build of 740,000 barrels. Estimations vary from a build of 1,700,000 to a build of 13,500,000.

Oil Technical Analysis: Nothing can move Oil higher for now

Oil prices are stuck, with only having limited upside potential it seems. With the recent string of events in global markets, Oil prices by now should have been up near $80.00 or higher, traders would presume, though markets are preferring to focus on the current sluggish demand. Expect this gridlock to stay in place until OPEC+ meets at the end of November and might intervene to provide a response to this sluggish demand climate. 

On the upside, $80.00 is the resistance to watch out for. Should crude be able to jump higher again, look for $84.00 (purple line) as the next level to see some selling pressure or profit taking. Should Oil prices be able to consolidate above there, the topside for this fall near $93.00 could come back into play.

On the downside, traders are seeing a soft floor forming near $74.00. That level is acting as the last line of defence before entering $70.00 and lower. Once in that area, markets might factor in the risk of a surprise intervention from OPEC+ to jack Oil prices back up again. 

US WTI Crude Oil: Daily Chart