- WTI bears are in the market below the gap.
- Demand concerns are driving the oil price lower.
West Texas Intermediate, WTI, is up by some 0.6% and has traveled within a range of between $75.24 and $74.08 so far. Following two days of losses that cut prices to the lowest since late March, the black gold is back on the mend in a mini short squeeze.
WTi has closed the gap that was put on the charts after OPEC+’s surprise 1.1-million barrel per day production cut. However, demand fears played in on Thursday after the United States reported its first-quarter Gross Domestic Product rose less than expected.
Real Gross Domestic Product advanced at a slower 1.1% QoQ AR clip in the first quarter with activity posting its first below-trend expansion since the second quarter of 2022, analysts at TD Securities noted. ´´First-quarter growth fell below consensus expectations at 1.9%, but it was largely in line with our 1.2% forecast. Under a context of rising uncertainty, we continue to look for activity to advance at a below-trend pace through the end of the year, with a recession likely starting in Q4 2023.´´
´´Still,´´ the analysts explained, ´´strong consumer-price data continue to underscore the stickiness of underlying inflation.´´
Nevertheless, the weak economic data continues to raise demand concerns and a recession in the United States could spark demand worries in other OECD nations. Meanwhile, the OPEC+ cuts will take effect on May 1. Today OPEC Secretary-General Haitham al-Ghais said the group was not looking to manage prices but is focusing on market fundamentals, according to reports.
Next up will be a weekly Baker Hughes rig-count report tomorrow at 1 pm ET.
WTI technical analysis
While below the gap resistance, the price is bearish on the front side of the trendline. A correction to the 38.2% Fibonacci has taken place already- on the 4-hour charts. However, there is plenty of support coming in which leaves the market in a sideways chop:
