. Oil Prices Drop to $81 with Gulf Ports Resuming Operations

Oil Prices Drop to $81 with Gulf Ports Resuming Operations

09 Jul 2024

WTI extends its decline to $81 as oil shipping ports near the Gulf of Mexico resume operations.


  • The price of oil continues to drop as concerns over supply ease with minimal impact from Hurricane Beryl.
  • Federal Reserve Chair Powell’s upcoming remarks may signal when rate cuts could be expected from the central bank.
  • Investors are keenly awaiting June CPI reports from China and the US this week.

In Tuesday’s early American session, West Texas Intermediate (WTI) futures on NYMEX continue their decline, nearing the $81.00 mark. The oil price is under selling pressure as worries about supply ease following reports from meteorological departments indicating that Hurricane Beryl weakened into a tropical storm upon hitting the Texas coast.

Prior to that, significant oil-shipping ports near the Gulf of Mexico, including Corpus Christi, Galveston, and Houston, were closed to prevent significant damage to infrastructure from Hurricane Beryl.

Geopolitically, increasing expectations of a ceasefire between Israel and Palestine have also reduced the likelihood of supply chain disruptions.

Meanwhile, investors are anticipating Federal Reserve (Fed) Chair Jerome Powell’s semi-annual Congressional testimony scheduled for 14:00 GMT. They are keenly observing for signals on when the Fed might begin reducing interest rates this year. Powell is expected to refrain from specifying a precise timeline for rate cuts, reflecting policymakers’ uncertainty about whether the disinflation trend has resumed following a pause in the first quarter.

This week, investors will closely monitor the release of the Consumer Price Index (CPI) reports from China and the United States (US), scheduled for Wednesday and Thursday respectively.

Oil prices are particularly sensitive to China’s inflation data, given its status as the world’s largest oil importer. China’s annual consumer inflation is anticipated to accelerate by 0.4%, while the Producer Price Index (PPI) is expected to show a moderated contraction of 0.8%.

In the US, investors will pay close attention to inflation data to gauge whether the disinflationary trend has restarted.


Technical Overview:

Crude Oil is trading within an up channel.

Crude Oil is moving below the 10&20 Moving Averages (SMA).

The Relative Strength Index (RSI) is in the Neutral Zone, while the Stochastic oscillator suggests a Neutral trend.

Immediate Resistance level: 83.38

Immediate support level: 81.80


Crude Oil initially traded higher before reversing to the downside, creating lower lows and experiencing a sharp decline. It then found support and swiftly recovered to the upside. Currently, Crude Oil is undergoing a minor pullback, heading towards a key support level. If this support holds, further upside movement is possible.

TRADE SUGGESTION- Limit Buy– 80.67, TAKE PROFIT AT- 83.44, SL AT- 78.97.