WTI crude oil cut the previous day's gains around $79.00, down by 1.22% intraday during Monday morning, as traders failed to ignore the broad risk-off atmosphere. So black gold also failed to welcome positive price news from Russia and OPEC. Russia will cut crude oil production by half a barrel per day starting in March (report from CNN Business). The news also cited Western sanctions over Moscow's energy supply restrictions as the catalyst behind the move that pushed up oil prices on Friday. Reporting from Reuters, OPEC Secretary General Haitham Al Ghais at an energy meeting in Cairo over the weekend said that the cartel expects global oil demand to exceed pre-pandemic levels in 2023.

 

wti crude oil
WTI Crude Oil Today

 


Meanwhile, expectations of high demand and less oil supply have led oil prices to fall. Risk aversion to the market combined with a stronger US dollar to weigh on commodity prices. Among the main catalysts triggering the DXY, up by 0.20% near 103.80 points at the time of writing, it raises concerns about mysterious objects flying across America and China. It was reported that the U.S. shot down nearly four foreign objects, while the Chinese state prepared to hit one unidentified object while weighing on market sentiment and pushing the DXY. 


The market's risk-off joins Fedspeak pointing slightly positive, especially after strong American consumer sentiment on Friday and inflation expectations that also weighed on WTI crude oil. Over the weekend, President of the Philadelphia Fed, Patrick Harker pushed back the chatter regarding the Fed's rate cuts during 2023. However, policymakers mentioned that it is likely that the Fed will not cut this year, it is likely that the cut plan will be in 2024 if they see inflation start to fall. Going forward, crude oil may wait for clear directions amid a thin calendar. Therefore, this could extend the latest pullback ahead of the US CPI on Tuesday for January. If the US inflation data comes stronger, then fears of hawkish Fed action and economic slowdown weigh on energy benchmarks. 


Technical Analysis


WTI crude remains sidelined between the one-week support line and the 100-DMA, near $78.80 and $80.90, respectively.


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