Oil prices are inching up by almost 1.00% as we head into Friday, with traders keeping a close watch on the final oil data releases for 2024. This week, trading has been anything but ordinary due to the Christmas celebrations, causing all major data releases to be pushed to Friday. Meanwhile, the US Dollar Index is holding steady, positioned just above 108.00 as we approach New Year’s Eve.
Crude Oil prices are on the rise this Friday as market participants gear up for a flurry of US data releases, including stockpile numbers from the Energy Information Administration (EIA). These releases were postponed to Friday following the Christmas holiday on Wednesday. While other asset classes are experiencing subdued trading activity, oil seems poised for a few last-minute surges before we wrap up the week.
The US Dollar Index (DXY), reflecting the strength of the US Dollar against a mix of other currencies, is hovering just shy of a two-year high, around 108.00. Volatility in the Greenback has settled, and it seems unlikely to stir up much as we near the year’s end. However, should any unexpected events arise, we might see a push to a new two-year high before New Year’s Eve.
Currently, WTI Crude Oil is trading at $70.00, and Brent Crude is at $73.33.
Oil News and Market Movers: What’s on the Calendar?
At 15:30 GMT, we’ll see the release of the weekly Gas Storage Change figures by the Energy Information Administration (EIA), with the previous week’s storage accumulating to 125 billion cubic meters. Following that, at 17:00 GMT, the EIA will unveil the Crude Oil stockpile change numbers, with expectations set for a drawdown of 2 million barrels compared to the previous reduction of 0.934 million barrels. Earlier in the week, API data revealed a stockpile decrease of 3.2 million barrels, though this was less than the prior week’s 4.7 million drop. Finally, capping off the day, the Baker Hughes Oil Rig Count will be released at 18:00 GMT, with the previous count reporting 483 rigs in operation.
Oil Technical Analysis: Last Minute Moves?
Come Friday, Crude Oil might be one of the main actors amidst the general Christmas market calm. With key data still on the horizon, oil traders should stay sharp, as opportunities might be fleeting. Expect short bouts of volatility, but a lasting rally seems unlikely moving into 2025.
Looking ahead, the 100-day Simple Moving Average (SMA) set at $70.59 and $71.46 (February 5 low) present strong resistance levels nearby. If additional supportive factors for oil emerge, the next key level to watch would be $75.27 (January 12 high). However, be cautious of quick profit-taking as the year draws to a close.
On the downside, $67.12, a level that provided support in May and June 2023 and throughout the last quarter of 2024, remains a critical support level. If this level gives way, we may see prices testing the 2024 low of $64.75, followed by $64.38, the 2023 low.
US WTI Crude Oil: Daily Chart
WTI Oil FAQs
What exactly is WTI Oil, you ask? It’s one of the key types of crude oil found on international markets, with WTI standing for West Texas Intermediate—a name it shares with Brent and Dubai Crude. WTI earns the label "light" and "sweet" due to its relatively low density and sulfur content, which makes it a high-quality oil that’s easy to refine. Originating from the United States, it’s distributed via the Cushing hub, famously known as “The Pipeline Crossroads of the World.” This type of oil consistently serves as a benchmarking standard, with its price frequently cited in media outlets.
Similar to all tradable commodities, WTI Oil prices are driven predominately by supply and demand. Global economic growth can spur demand, while lackluster growth may do the opposite. Political turbulence, conflicts, and sanctions can all throw supply into disarray, impacting prices. OPEC’s production decisions are another major influence, and since oil is mainly traded in US Dollars, fluctuations in the Dollar’s value can also affect prices—essentially, a weaker Dollar can make oil more attractive and vice versa.
The oil inventory reports that roll out weekly from the American Petroleum Institute (API) and Energy Information Administration (EIA) also sway WTI Oil prices. Variations in inventories mirror changing supply and demand dynamics. A drop in inventory numbers often signals elevated demand, potentially pushing prices up, while higher inventories might imply more supply, possibly leading to reduced prices. API’s updates hit the market each Tuesday, followed by EIA’s on Wednesday. Generally, their data aligns closely, within about 1% of each other, around 75% of the time, though EIA’s numbers often hold more weight as it’s a government agency.
OPEC, formally known as the Organization of the Petroleum Exporting Countries, comprises 12 oil-producing nations that meet biannually to set production quotas for member states. Their decisions significantly influence WTI Oil pricing. Lowering quotas can tighten supply, driving prices up, whereas boosting production usually has the opposite effect. OPEC+ expands this group to include an additional ten non-OPEC members, with Russia being notably prominent.
