WTI juggles below $80.00 as investors shift their focus toward Fed commentary

• Oil prices are displaying sideways auctions ahead of Fed Powell’s speech.
• The US API has reported a drawdown in oil inventories consecutively for the third time.
• Russia is not interested in supplying oil at a new price cap in any case.
• OPEC+ is expected to accelerate supply cuts to offset recent weakness in oil prices.

West Texas Intermediate (WTI), futures on NYMEX, is displaying back and forth below the critical resistance of $80.00 in the early European session. The oil prices have been sidelined by the market participants as investors are awaiting the speech from Federal Reserve (Fed) chair Jerome Powell for fresh impetus.

The black gold has turned sideways after a stellar responsive buying action near $74.00 witnessed on Monday. The recent rally and bullish projections for oil prices bank upon significant pressure on the US Dollar ahead of Fed Powell’s speech. Investors are keen to know whether the Fed is firmly considering the option of a deceleration in the interest rate hike pace after a slowdown in October’s inflation.

Meanwhile, a significant plunge in oil stockpiles figured by the United States American Petroleum Institute (API) for the week ending November 25 has also strengthened oil prices. The oil inventories have dropped by 7.85 million barrels. This is the third consecutive drawdown in oil inventories reported by the API, which has infused fresh blood in the oil bulls. However, investors would wait for the official oil inventory report by the Energy Information Administration (EIA) for meaningful cues.

Meanwhile, headlines from Russia that the nation won’t provide oil under price cap in any case, cited by the country’s Deputy Prime Minister Alexander Novak, have bolstered the case of supply worries.

Also, expectations for deepening supply cuts by the OPEC+ in its meeting in December are keeping reins in oil bulls.  The oil cartel announced that the promise of a two million barrels per day production cut will extend to the end of CY2023. Considering the recent weakness in oil prices, the oil mafia could accelerate production cuts further.