WTI Crude Dips Below $78 with Rate Cut Uncertainty

On Wednesday, WTI crude futures dipped to approximately $78 per barrel, marking the third consecutive session of declines. Uncertainty surrounding the timing of potential interest rate cuts by the US Federal Reserve weighed on the demand outlook. Fed officials this week have emphasized the need for caution and expressed the necessity for greater confidence in inflation returning to the 2% target before considering rate adjustments. Additionally, industry data revealed a surprising increase of 2.48 million barrels in US crude inventories last week, contrary to expectations of a 3.1 million barrel decline. Furthermore, the risk premium associated with tensions in the Middle East has subsided as oil supplies remain unaffected. Attention now turns to the upcoming OPEC+ meeting scheduled for June 1, where major oil producers are expected to extend output cuts to mitigate the risk of a global oversupply and support prices.

Despite experiencing downward movements below $77.60, oil managed to reclaim this level. Looking ahead, this level will serve as the initial support, with potential downside targets of $76.80 and $75.80 if breached. Conversely, if the price reverses upwards, the first resistance level to watch is $78.30. If this level is surpassed, further resistance may be encountered at $79.10 and $80.10, respectively.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
80.10	79.10	78.30	77.60	76.80	75.80