WTI under pressure on demand-side despite supply cuts feeding through to data.
Fed sombre note leaves markets in limbo and looking to GDP as next guide.

WTI is trading at $41.27 at the time of writing in a consolidation of the jittery environment between the $40 and $42 levels.

Prices rose slightly on Wednesday, however, after a steep drop in crude inventories. Nonetheless, rallies are capped pertaining to record days for coronavirus cases worldwide.

US crude oil inventories fell by 10.6 million barrels last week to 526 million barrels, the Energy Information Administration said, which was the largest drawdown since December.

Net US crude imports fell 1 million barrels per day to 1.9 million bpd,

Supply cuts agreed in April by theOrganization of the Petroleum Exporting Countries and its allies, finally being realized are likely playing their roll in the data.

Energy markets remain bounded by concerns surrounding demand, while at the same time, OPEC+ supply is on the rise and US production has ticked higher as well, keeping expectations in check,

analysts at TD Securities said.

Looking forward, however, while US production creeps off the lows, we note that the evidence suggests that shale production growth may not see a mass revival just yet. The cost of capital for production has risen, potentially permanently so. This creates a set-up in which energy prices could potentially trade significantly higher in the future.

Meanwhile, it was a sombre note from the Fed today.

Fed Chair Powell said the central bank will sustain historic monetary policy until it’s confident the economy has navigated through the Covid-19 pullback.

“We are committed to using our full range of tools to support the economy in this challenging time,” Powell said. “We have held our policy rate near zero since mid-March and have stated that we will keep it there until we are confident the economy has weathered recent events and is on track to achieve our maximum employment and price stability goals.”

For the rest of the week, tomorrow’s release of US Q2 Gross Domestic Produce will provide concrete evidence on how the pandemic has affected activity.

We will be able to gauge the magnitude of the output gap that needs to be closed and thus depict a probable scenario for energy demand implications.

US Q2 GDP is forecast to fall by a record 35% saar, roughly equating to a 9% QoQ drop.

WTI levels

OVERVIEW
Today last price	41.38
Today Daily Change	0.21
Today Daily Change %	0.51
Today daily open	41.17

TRENDS
Daily SMA20	40.8
Daily SMA50	38.61
Daily SMA100	31.93
Daily SMA200	43.85

LEVELS
Previous Daily High	41.99
Previous Daily Low	40.94
Previous Weekly High	42.52
Previous Weekly Low	39.99
Previous Monthly High	41.65
Previous Monthly Low	34.45
Daily Fibonacci 38.2%	41.34
Daily Fibonacci 61.8%	41.59
Daily Pivot Point S1	40.74
Daily Pivot Point S2	40.31
Daily Pivot Point S3	39.68
Daily Pivot Point R1	41.8
Daily Pivot Point R2	42.43
Daily Pivot Point R3	42.86

Reprinted from FXStreet.com，the copyright all reserved by the original author.

https://www.fxstreet.com/news/forex-today-fed-passes-with-little-notice-ahead-of-q2-gdp-202007292028

WTI stuck between a $40/42 big figure range as traders weigh demand risks