WTI backslides into $78.50 after climbing to $80.00

After US Fed Chair Jerome Powell stated that the Fed does not anticipate an increased danger of recession in the US economy, WTI US Crude Oil surged to its highest bids in a week.

WTI immediately changed direction and dropped back into the $78.50 range, but it is still in the green territory, gaining 1.22% after the Energy Information Administration’s (EIA) lower-than-expected Crude Oil Stocks Change report. This reinforces the US barrel count increase that the American Petroleum Institute (API) reported late on Tuesday, which was less than anticipated.

In the first of two days of question and answer sessions on the Fed’s Semi-Annual Monetary Policy Report, Fed Chair Powell appeared before the US Congressional House Financial Services Committee on Wednesday. In light of the fact that he believes there is little chance of a recession in the US economy this year, Fed Chairman Powell stated that policy easing should start later this year, provided that inflation stays below the Fed’s target of 2%.

Markets are lowering their expectations for risk appetite ahead of Friday’s US Nonfarm Payrolls (NFP) labour data, which are predicted to weaken to 200K for February from January’s 11-month peak of 353K. This is despite a brief spike in interest rate decrease predictions.

The US Weekly Crude Oil Stock for the week ending March 1 increased by a meagre 423K barrels, according to the API late on Tuesday. This was far less than the 8.428 million barrel addition that occurred the previous week and was below the expected 2.6 million barrel gain. During the same period, the EIA’s own Crude Oil Stocks Change contributed 1.367 million barrels to the weekly total, falling short of the 2.116 million expected and reversing the previous week’s nearly 4.2 million barrel excess.

Erasing barrel counts have increased expectations that US refining will start to chip away at the supply of crude oil that is filling the pipeline, but only enough to maintain WTI positive by roughly 1% following its Wednesday peak of 3.25% bottom-to-top for the day.

WTI caught a clean bearish rejection from the $80.00 handle on Wednesday, tumbling back into $78.50 after rallying three and a quarter percent from the day’s low near $77.50.