Jakarta, GIC Trade – WTI crude oil futures stabilized near $80 per barrel on Thursday after losing over 2% in the previous session, as a recent downgrade of U.S. credit ratings by Fitch prompted risk-off sentiment in the financial markets.
 
West Texas Intermediate (WTI), the U.S. benchmark crude oil, traded around $79.35 on Thursday. WTI prices faced some selling pressure and corrected lower from $82.12, the highest since April 14, due to the largest decline in U.S. crude oil inventories since 1982.
 
News that the Biden administration postponed plans to replenish the U.S. Strategic Petroleum Reserve amid high energy prices also weighed on the market.
 
Meanwhile, oil prices were supported by EIA data showing U.S. crude oil inventories fell by about 17 million barrels last week, the largest draw since records began in 1980, and far exceeding market expectations for a draw of 1.367 million barrels.
 
On the other hand, the American Petroleum Institute indicated on Tuesday that U.S. crude oil stocks dropped by about 15.4 million barrels in the week ending July 28, following a rise of 1.319 million barrels the previous week.
 
Investors are also preparing for an OPEC meeting on Friday, where Saudi Arabia is expected to announce an extension of voluntary production cuts of 1 million barrels per day until September.
 
Fundamentally, WTI crude oil prices corrected amid a strengthening U.S. dollar, making purchases more expensive for buyers using other currencies, thus reducing demand. However, the decline in inventories limited the decrease. Now, let’s look at the technical analysis:
 
Technical Analysis

 
On the hourly chart, oil prices are attempting to move lower, needing to break through the support level at 78.45 to reach the next support level at 77.00. To shift the bias to bullish, oil prices need to break through the resistance level at 79.11 to reach the next resistance level at 80.40.
 
This analysis reflects the author's views from both fundamental and technical perspectives and is not intended as advice or a recommendation. For more information, click the image below.