WTI Crude Oil Price Hits Lowest Level Since November Amid Banking Industry TurmoilMarch 18, 2023
The price of a barrel of WTI or West Texas Intermediate, a benchmark crude oil, has declined to $65.22 on the closing day of the week. This figure is the lowest seen since November 2022 and is trading lower due to the financial turmoil in the markets caused by uncertainty in the banking industry.
The crisis was triggered by the decline and shutdown of SVB and Signature Bank in the last week, escalated by the problems that Credit Suisse is facing. This crisis has led to a steady decline in the stock market in the last week.
Despite the government’s billion-dollar war chest to save the banks, the stock market continues to decline. The government’s efforts have not been enough to calm the market as the uncertainty in the banking industry persists.
Despite the efforts of the government to stabilize the market, investor concerns remained steady with the collapse of the First Republic. This drop has caused a catastrophic red zone in the EU and US indices, ending the week in the red.
WTI is down for the fifth day in a row, with the technical readings on the daily chart indicating continued declines. Once the commodity trades below its current price, it could see an extended downturn that could see the commodity target the $60 range, a strong psychological barrier.
Currently, black gold is finding the bears at $70 and below, and sustaining the future price above this level will be difficult.
Key CPI Data to Determine Canadian Dollar Direction in Next Week
The USD/CAD pair has gained momentum lately, reaching a fresh high of 1.3772. This news comes after the pair bounced back from the bottom and posted small weekly losses. However, economic data from Canada has not been favorable, as seen in the Industrial Product Price Index’s decline of 0.8%.
This figure was a surprise, given the 1.6% uptick in the index in the previous period. Similarly, the Raw Material Price Index also shed 0.4%, below the estimated 0%. These figures made the Canadian dollar the worst-performing currency of the day.
Investors will eagerly await key CPI data on Tuesday, which is expected to show a 0.4% month-over-month increase, with the annual rate slowing down to 5.8% in January and hitting 5.5%. These figures will significantly impact the market and determine the direction of the Canadian dollar in the next week.
In the meantime, market sentiment remains mixed, with the US dollar showing some weakness against other major currencies. However, the USD/CAD pair has been able to hold its ground and continue its upward trend.
As the US stock market continues to decline, the USD is showing mixed performance and attempting to stage a recovery. Meanwhile, US yields have dropped by over 3.9%, with long-dated bonds circulating at 3.41%, which is still above the lows in March.
The USD/CAD pair has been moving in and out of highs and lows in recent sessions, hitting a low of 1.3676 but jumping to 1.363, indicating short-term volatility. However, the pair is consolidating above the 20-day SMA at 1.3655 and the key support area at 1.3670. As long as it stays above this support, the outlook remains relatively conservative for the pair.