Oil Set for Weekly Loss as Economic Woes Reign Amid Thin Trading

West Texas Intermediate traded near $80 per barrel, on pace for a weekly decline of more than 3%, as weak economic data and a deepening housing downturn in China weighed on risk assets. The gloom has overshadowed indicators of a tighter petroleum market, such as US inventories that have fallen to their lowest level since January.

On Thursday, West Texas Intermediate open interest fell to its lowest level since January.

Ed Moya, senior market analyst at Oanda, stated, “I don’t see any reason for an energy trader to stay for today’s session.” Energy merchants will be in a state of limbo pending the release of any new information from China.

In the United States, Federal Reserve policymakers have signaled that they may not be done raising interest rates to combat inflation, bolstering Treasury yields and the dollar. Next week, officials will convene in Jackson Hole, Wyoming, potentially providing additional insight into Fed sentiment.

The US dollar is on track for a fifth consecutive weekly gain, the longest streak in more than a year, which diminishes the appeal of commodities to foreign purchasers.

OPEC+ pillars Saudi Arabia and Russia are primarily responsible for the sustained increase in crude prices from their June lows. This has prompted numerous analysts, including the International Energy Agency, to anticipate tighter balances and higher prices by the end of the year. Citigroup Inc. and others have countered that the price of crude will decline as consumption declines and supply increases.

Brent has struggled to surpass its 2023 highs in recent days, leading Rabobank analyst Joe DeLaura to predict that Brent will not break out of its yearly range. We expect the present macro overhang and deteriorating Chinese economic data to maintain this ceiling.

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button

Adblock Detected

our website is completly depends on ad revenue please disable ad blocker and support us. don't worry we will not use any popup ads you can see only ads by google.