- WTI pares the biggest daily loss in over a week ahead of the key activity data for July.
- Restoration of Nord Stream 1 gas pipeline drowned oil prices despite risk-on mood, softer USD.
- Libya’s resumption of oil production, ECB rate hikes and fears of a recession in China favor sellers.
- Key PMIs for the US, Eurozone and the UK will be crucial to watch.
WTI crude oil prices remain sidelined at around $96.00 after posting the biggest daily slump in eight days, as energy traders await fresh clues. The black gold dropped heavily the previous day, despite the risk-on mood, amid fears of more output and less demand.
The resumption of gas flows from Russia’s Nord Stream 1 pipeline was the key catalyst weighing the oil prices. “Flows through Russia's Nord Stream 1 natural gas pipeline, which runs under the Baltic Sea to Germany, partially resumed after being shut for maintenance on July 11. The pipeline had already run on reduced volumes following a dispute sparked by Russia's invasion of Ukraine,” said Reuters.
On the same line as the European Central Bank’s (ECB) higher-than-expected 0.50% rate hike, as well as the announcement of the Transmission Protection Instrument (TPI) tool. Analysts at Australia and New Zealand Banking Group (ANZ) describe it as a bond purchase program aimed at countering unwarranted disorderly market dynamics that pose a risk to effectively delivering on its price stability mandate.
Elsewhere, the resumption of oil production by Libya's National Oil Corp (NOC) and fears of China’s economic slowdown, as signaled by the Asian Development Bank (ADB) the previous day, also weigh on the black gold prices.
It’s worth noting, however, that the softer US dollar and risk-on mood may help the energy benchmark to lick its wounds.
Moving on, the preliminary activity details for July will be important for the oil traders amid fears of an economic slowdown. Also important will be how the major oil producers react to the US-led push to increase the output to tame the prices. Recently, Russian President Vladimir Putin called Saudi Arabia’s Crown Prince Mohammed bin Salman to discuss the output as they both led OPEC+ producers in June.
Technical analysis
Despite the U-turn from $100.69, WTI bears need validation from the 200-DMA level of $93.65 to retake control.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD posts gain, yet dive below 0.6500 amid Aussie CPI, ahead of US GDP
The Aussie Dollar finished Wednesday’s session with decent gains of 0.15% against the US Dollar, yet it retreated from weekly highs of 0.6529, which it hit after a hotter-than-expected inflation report. As the Asian session begins, the AUD/USD trades around 0.6495.
USD/JPY finds its highest bids since 1990, approaches 156.00
USD/JPY broke into its highest chart territory since June of 1990 on Wednesday, peaking near 155.40 for the first time in 34 years as the Japanese Yen continues to tumble across the broad FX market.
Gold stays firm amid higher US yields as traders await US GDP data
Gold recovers from recent losses, buoyed by market interest despite a stronger US Dollar and higher US Treasury yields. De-escalation of Middle East tensions contributed to increased market stability, denting the appetite for Gold buying.
Ethereum suffers slight pullback, Hong Kong spot ETH ETFs to begin trading on April 30
Ethereum suffered a brief decline on Wednesday afternoon despite increased accumulation from whales. This follows Ethereum restaking protocol Renzo restaked ETH crashing from its 1:1 peg with ETH and increased activities surrounding spot Ethereum ETFs.
Dow Jones Industrial Average hesitates on Wednesday as markets wait for key US data
The DJIA stumbled on Wednesday, falling from recent highs near 38,550.00 as investors ease off of Tuesday’s risk appetite. The index recovered as US data continues to vex financial markets that remain overwhelmingly focused on rate cuts from the US Fed.