WTI: Bears eye a break below $43, as Hurricane Laura weakens to Category 3
- Hurricane Laura weakened to Category 3, WTI in lows.
- Broad US dollar weakness offers support to oil bulls.
- WTI hit fresh five-month highs at $43.77 on Wednesday.
WTI (futures on Nymex) wallows in the lower band of Thursday’s trading so far, as the bears remain in control amid the cautious market mood.
Investors refrain from holding risk assets ahead of the all-important Federal Reserve (Fed) Chairman Jerome Powell’s speech at the annual Jackson Hole Symposium.
The price corrected towards the $43 level, as the National Hurricane Center (NHC) said that Laura has weakened to Category 3.
At the time of writing, the US oil trades at $43.25, down 0.28% on the day, having hit fresh five-month highs at $43.77 on Wednesday. Despite the fresh leg down, the black gold remains in a familiar trading range seen since early Asia.
The barrel of WTI finally dived out of the three-week-long channel a day before, thanks to the storm brewing in the Southern state of the US. The alert on Hurricane Laura was raised to Category 4, as it made landfall in Southwest Louisiana earlier today.
The bulls also cheered a fifth weekly decline in the US crude stockpiles, as per the latest data published by the Energy Information Administration (EIA). The US crude inventories fell by 4.7 million barrels for the week ended Aug. 21.
Markets now await Powell’s speech for fresh dollar trades. Meanwhile, the USD-sensitive oil looks to find some support from broad-based US dollar weakness amid dovish Fed expectations.
WTI technical levels to watch
“WTI Crude hits 200-day moving average resistance at 4340/50. Try shorts with stops above 4380. A break above here is a medium*term buy signal, initially targeting 4480/4500. Shorts at 4340/50 target 4300/290 & first support at 4290/80. We could pause here but it should be worth running some shorts as far as 4240/4220. A break below 4200 is the next important sell signal,” Jason Sen, Director at DayTradeIdeas.com, noted.
WTI additional levels