WTI moving sideways, with upside attempts capped below $84.50
- WTI prices tick up above $84, bulls remain capped at $84.50.
- Fears of a global recession and lower Chinese demand hurt crude prices.
- US commercial oil stocks declined unexpectedly.
WTI futures are trading without clear direction on Wednesday, despite the unexpected decline in US oil inventories. The West Texas Intermediate retreated to session lows at 82.60 earlier today, before attempting to pare losses, although recovery attempts remained capped below 84.50.
Oil prices suffer amid global recession fears
Crude prices have depreciated about 10% over the last two weeks amid a combination of increasingly negative global economic perspectives and fears of a decline on Chinese demand.
The Chinese Government has delayed the release of key indicators scheduled to be published this week, including the third quarter’s GDP, which was due on Wednesday. This decision has been taken negatively by the market and has increased doubts about China’s economic momentum and its potential impact on oil demand.
Furthermore, US President Joe Biden has confirmed his commitment to keep releasing crude from the country’s oil reserves, which has increased negative pressure on prices.
Against this backdrop, the unexpected decline in US commercial oil inventories has been unable to push crude prices higher. The EIA reported earlier on Wednesday a 1.725M decline in inventories in the week of October 14 against market expectations of a 1.38M increase.
Technical levels to watch