WTI retreated below the $83.00 post soft CPI data

Soft inflation figures from the US and weaker US dollar contribute to limiting crude oil’s losses. Eyes now are focusing on the Fed speaker later during the US trading session. WTI’s outlook remains positive amid reports suggesting tighter global supplies.

On Thursday’s session, the WTI crude saw more than 1% losses as investors seem to be taking profits after jumping to a high since November 2022. However, a weaker USD may limit the session’s downside as well as tighter global supplies which cushion Oil prices.

The Consumer Price Index (CPI) for the US rose by 0.2% MoM in July, as predicted, according to the US Bureau of Labor Statistics. However, the annual measure fell to 3.2% YoY, below the 3.3% forecast. In line with expectations, the Core measure increased by 0.2% in the same month, while the YoY measure declined by 4.7% rather than the 4.8% anticipated.

In reaction, US Treasury yields reacted rapidly to the downside as investors are betting on a dovish Federal Reserve, which applied selling pressure to the USD. Higher rates tend to be negatively correlated with Oil prices as they cool down the economy bringing down energy demand and prices.

On the upside, the prospects of further voluntary by the Saudis will contribute to further upside. In addition, a sluggish Chinese economy may push the local government to carry on more aggressive stimulus, which would bolster the economy of the world’s biggest oil importer, meaning a higher energy demand.

Analyzing the daily chart, the WTI technical outlook is bullish in the short term despite the price correction. The barrel stands well above the 20,100,200-day Simple Moving Averages (SMAs) indicating that the bulls have the upper hand but further correction shouldn’t be taken off the table for the near term as the Moving Average Convergence Divergence (MACD) is flashing signs of bullish exhaustion.