- Western Texas Intermediate (WTI) drops almost 1%, extending its losing streak to three days.
- Mixed US data and weaker Industrial Production and Retail Sales from China keep producers uncertain of total oil requirements.
- The Iran nuclear deal agreement would free additional crude to the global market, a sign of lower energy prices.
US crude oil benchmark, known as WTI, drops to six-month lows on recession fears, alongside mounting speculation of an Iran deal, which would free more than 700K barrels per day to the battered oil market. In the meantime, Wester Texas Intermediate (WTI) exchanges hands at $87.15 PB, slightly down 0.80%.
Investors’ mood remains upbeat, with US equities posting recoveries, despite an ongoing deceleration in the US economy. Albeit US Industrial Production exceeded estimations to the upside, underpinned by motor vehicles and higher manufacturing output, US Building Permits and Housing Starts for August plunged into contractionary territory, courtesy of higher interest rate increases by the Federal Reserve.
Worth noting that the Atlanta Fed GDPNow for the third quarter (Q3) dropped from 2.5% to 1.8%, though slightly better than the Q2 advanced reading.
The factors abovementioned weighed in oil prices, with WTI further tumbling below the 200-DMA at $95.51. Additionally, Monday’s data from China revealed that Retail Sales and Industrial Production missed expectations, increasing uncertainty about oil’s demand.
Elsewhere, talks between Iran and the EU regarding the nuclear accord seem to be progressing. Sources cited by Bloomberg commented that the “potential for a deal is being priced in.” That said, volatility around the oil market should increase until a final announcement is made.
If Iran’s nuclear deal is approved, oil from Teheran would be seen as a relief to high energy prices, particularly consumers, which had been dealing with skyrocketing petrol and gasoline prices, with countries like the US battling inflation at 4-decade highs.
WTI Key Technical Levels
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