WTI slides despite USD falling to lowest in two years

WTI under pressure despite a lower US dollar at the start of the week.
US oil production remains constrained after Laura's progress through the Gulf.

Ross J Burland FXStreet

The price of oil is currently trading at $42.87 having travelled between a low of $42.58 and a high of $43.54, lower by 0.14%.

Meanwhile, Hurricane Laura spared key energy infrastructure from major damage, muting its impact on global energy markets. In this context, market participants will return their focus towards the recovery in global energy demand.

China bouncing back

Chinese data yesterday revealed an economy that continues to expand for the 5th consecutive month.

China’s official manufacturing Purchasing Manager’s Index (PMI) for the month of August came in at 51.0 as compared to 51.1 in July, according to the National Bureau of Statistics.

Analysts polled by Reuters had expected August PMI to come in at 51.2. However, the Composite reading was stronger due to growth in Services.

Services moved at a faster clip in August with the official Non-manufacturing PMI coming in at 55.2 as compared to 54.2 in July.PMI readings above 50 indicate expansion.

Manufacturing activity and industrial output have been in expansion for the fifth straight month.

Moreover, fiscal support will be stepped up in the coming months so markets are predicting further upside in industrial activity.

However, on the coronavirus front, Chinese growth comes amid virus flare-ups in Europe and Asia which threaten to derail the recovery in demand growth.

The Federal Reserve has shown how uncertain members are with respect tot he virus and the road ahead for both the US and global economy.

At the Jackson Hole, Powell made an announcement that effectively cemented the negative USD real yield narrative at a time where the Fed's stimulus has driven risks assets higher.

The adoption of average inflation targeting and tolerance for inflation overshot suggests a number of bearish factors for the markets to consider when seeking a fair value in the greenback.

WTI levels

Overview
Today last price	43.01
Today Daily Change	-0.12
Today Daily Change %	-0.28
Today daily open	43.13

Trends
Daily SMA20	42.51
Daily SMA50	41.29
Daily SMA100	35.42
Daily SMA200	42.26

Levels
Previous Daily High	43.52
Previous Daily Low	42.83
Previous Weekly High	43.86
Previous Weekly Low	42.3
Previous Monthly High	42.52
Previous Monthly Low	38.73
Daily Fibonacci 38.2%	43.26
Daily Fibonacci 61.8%	43.1
Daily Pivot Point S1	42.8
Daily Pivot Point S2	42.47
Daily Pivot Point S3	42.11
Daily Pivot Point R1	43.49
Daily Pivot Point R2	43.85
Daily Pivot Point R3	44.18

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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