In the North American session, crude oil is trading at $58.49, down $0.60 or 1.00%. Brent crude oil futures are trading at $63.40, up $0.74 or 1.18%.
The U.S. released consumer inflation earlier on Wednesday. CPI ticked lower to 0.3%, down from 0.4% a month earlier. Still, this beat the estimate of 0.2%. The core release remained steady at 0.2%, matching the forecast.
Crude Inventories Points to Surplus
Oil prices are lower on Wednesday, after a surprise surplus from the Energy Information Administration (EIA). The EIA estimated a gain of 0.8 million barrels last week, surprising analysts that had projected a decline of 2.9 million. Since mid-September, the EIA report has shown surpluses in 10 out 12 releases, which has capped any substantial upward movement by crude.
Will Fed Statement Boost Crude Prices?
The Federal Reserve will make its rate announcement at 19:00 GMT. There shouldn’t be any surprises about the benchmark rate – the CME Group has set the odds at 97.8 percent that the Fed will stay on the sidelines and maintain the current Fed funds rate of between 1.50% and 1.75%. This means that investors will be focused on the Fed rate statement and the most recent projections from FOMC members. I would not be surprised to see a hawkish tone from rate-setters, given the fact that recent U.S. economic numbers have been stronger than expected. The second-estimate GDP for Q3 showed that the economy gained 2.1%, above the initial estimate of 1.9 percent. Another key release, nonfarm payrolls, jumped to 266 thousand in November, compared to 128 thousand a month earlier. If the Federal Reserve gives a vote of confidence to the U.S. economy on at the Wednesday meeting, oil prices could move higher.
There is immediate resistance at 59.25. If the pair can break above this line, the symbolic level of 60.00 will be vulnerable.
On the downside, there is strong pressure at 58.50. Below, there is support at 57.50. This is followed by the 200-EMA at 57.09 and the 50-EMA at 56.81. With crude facing significant support barriers, the trend remains upward.
This article was originally posted on FX Empire
More From FXEMPIRE:
- E-mini S&P 500 Index (ES) Futures Technical Analysis – Strengthens Over 3144.00, Weakens Under 3130.00
- Crude Oil Price Forecast – Crude Oil Markets Soften Up A Bit
- Tadawul All Share Index
- USD/JPY Price Forecast – US Dollar Continues Building Case Against Japanese Yen
- Crude Prices Dip After Crude Inventories Surplus
- EUR/USD Mid-Session Technical Analysis for December 11, 2019