Oil eases from four-month high amid strengthening US Dollar

• WTI Oil eases a touch on Wednesday after its five-day winning streak. 
• Oil traders are seeing earlier bullish bets play out with several supply issues at hand. 
• The US Dollar Index trades firmly higher ahead of the Fed rate decision. 

Oil prices eased slightly on Wednesday, keeping above the $80 level and returning more than 5% gains in five trading days. The recent upside move comes amid increasing supply issues in Russia and the need to refill the US crude stockpile, swirling up demand. The most recent decline, meanwhile, can be attributed to a stronger US Dollar.

The US Dollar, meanwhile, has performed a similar five-day winning streak after it got an accelerator on Tuesday during Asian trading hours with the Bank of Japan rate decision. Looking ahead to this Wednesday, the US Dollar is facing the US Federal Reserve monetary policy decision. Besides the speech from Fed Chairman Jerome Powell, the economic projections – which include the dot plot – will be the most important piece of information to look at. 

Crude Oil (WTI) trades at $82.10 per barrel, and Brent Oil trades at $86.25 per barrel at the time of writing. 

Oil news and market movers: Russia faces weather issues

• Chinese Customs figures show that China has imported Oil from Venezuela in February for the first time since 2019, Bloomberg reports.
• Russian crude exports have dropped because of maintenance work at the Baltic port of Primorsk and severe weather conditions (strong winds) around Kozmino on the Pacific Coast have hit shipments from the two most important oil ports. This translates into a three-day delay in loading and shipping. 
• China secured another lot of 2 million barrels from Abu Dhabi, bought by Cnooc. 
• Overnight, the American Petroleum Institute released that the US Crude stockpile is facing more drawdowns. Last week it saw a drawdown of 5.521 million barrels, against 1.519 million for this week. 
• This Wednesday at 14:30 GMT, the Energy Information Administration will release its US stockpile numbers. Expectations are for a small build of 13,000 barrels against the draw last week of 1.536 million barrels. 

Oil Technical Analysis: $90 still far off though possible

Oil prices are setting the stage for more upside with a mixture of supply issues and bigger drawdowns in the US. This is the plan OPEC+ was hoping for to soon play out, with the US unable to keep up the pace of its constant Oil production for filling up the gap of the OPEC+ Oil cuts. With the US production falling back now and even Russia supply facing some delay, a squeeze to the upside is taking place.  Last week FXStreet reported several bullish positions being taken in the options markets, which are now playing out.

Oil bulls will see $86 appearing as the next cap. Further up, $86.90 follows suit before targeting $89.64 and $93.98 as top levels. 

On the downside, both $80.00 and $80.60 should be acting as support now with the 200-day Simple Moving Average (SMA) as the level to catch any falling knives near $78.33. The 100-day and the 55-day SMA’s are near $75.56 and $76.35, respectively. Add the pivotal level near $75.27, and it looks like the downside is very limited and well-equipped to resist the selling pressure. 

US WTI Crude Oil: Daily Chart