WTI recovers to $78.80 amid the softer US Dollar, all eyes on US NFP data
- WTI trades in positive territory near $78.80, gaining 0.51% in Friday’s Asian session.
- The prospect of a rate cut from the Fed, a smaller-than-expected US crude oil inventory boosts black gold.
- Oil traders await the revision of the Eurozone Q4 GDP growth number and US labor market data.
Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around $78.80 on Friday. WTI prices edge higher amid the weaker US Dollar (USD) and the prospect that the Federal Reserve (Fed) will lower interest rates this year.
On Thursday, the Chinese Import and Export data for February came in better than expected, indicating a positive signal about the recovery in the second-largest world economies. This, in turn, provides some support to the WTI prices as China is the world’s largest crude oil buyer.
The Fed Chairman Jerome Powell said on Thursday that interest rates have likely peaked and are expected to come down this year despite a cautious stance from the central bank. This potentially lifts the WTI prices as a lower interest rate can increase oil demand.
Furthermore, a smaller-than-expected US crude oil inventory boosts the WTI prices. According to the weekly EIA Crude Oil stockpiles report, US commercial crude oil inventories rose by 1.367M barrels per day (bpd) for the week ending March 1 amid recovering refinery runs from 4.199M bpd in the previous week. The market was anticipating an increase of around 2.166M bps.
Oil traders will closely watch the revision Eurozone Gross Domestic Product (GDP) for the fourth quarter. Also, the US Nonfarm-Payrolls, Unemployment Rate, and Average Hourly Earnings for February will be due on Friday. These events could significantly impact the WTI price. Oil traders will take cues from the data and find trading opportunities around WTI prices.