- Data from the US EIA reveal a significant drop in oil reserves, with a contraction of 5.96 million barrels last week.
- Disappointing economic indicators from China, including retail sales and investment figures, raise concerns for global oil demand.
- Supply cuts from Saudi Arabia and Russia serve as a buffer, while the Fed’s monetary policy stance could influence the US dollar and commodity prices.
He Western Texas Intermediate (WTI)Benchmark US crude extends losses below the psychological $80.00 mark amid falling US oil stocks, while fears over China’s economic slowdown could weigh on the demand for oil, as reflected in the price of WTI. At the time of writing, WTI was trading at $79.70 per barrel, after reaching a daily high of $81.39.
US crude production increases and inventories fall; China’s economic slowdown hampers oil demand
On Wednesday, data from the US Energy Information Administration (EIA) showed that inventories fell as exports rose, despite crude production reaching its highest levels since the Covid-19 pandemic hit. fuel consumption. Stocks fell by 5.96 million barrels in the week ending August 11, to 439.7 million barrels, above estimates for a contraction of 2.3 million barrels.
Oil prices are also being affected by the latest data from China, the world’s second largest economy, as business activity is constrained, retail sales disappoint, investment figures miss estimates and a deflationary scenario threatens to hit to Chinese government growth estimates of 5%.
However, supply cuts from Saudi Arabia and Russia cushioned the fall in oil prices as WTI continues to trade around July peaks.
Apart from this, WTI traders would refer to the latest Federal Reserve (Fed) Monetary Policy Minutes, as the strength of the US Dollar (USD) weighed on commodity prices. Investors are looking for clear signals that can ensure that the Fed’s tightening cycle is over. The latest Fed speeches have shown officials turning neutral, as former hawkish members like Atlanta Fed President Raphael Bostic and Philadelphia Fed President Patrick Harker said they were not need more magnifications.
WTI technical levels
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
