- WTI drops in Europe as global oil demand growth concerns take over.
- Trade progress limits losses ahead of US Consumer and Rigs Count data.
WTI (futures on Nymex) broke its Asian consolidative mode to the downside in the European session, now looking to retest the 54.00 support zone ahead of the crucial consumer and rigs count data from the US.
Downside looks more compelling, despite trade hopes
The barrel of WTI failed to sustain the bounce above the 55 handle and turned south, as the sentiment remains weighed down by looming concerns about a slowdown in the global economy and oil demand.
Both the OPEC and International Energy Agency (IEA), in their latest monthly oil market report, raised concerns over dwindling oil demand growth outlook. Meanwhile, increased expectations that the US could ease its stance on Iran combined with a non-event OPEC+ meeting continue to collaborate to the downside risks.
However, the downside appears cushioned amid a better market mood, fuelled by the recent progress on the US-China trade front. The US President Trump delayed tariffs on Chinese good by two weeks in response to China’s exemptions of 16 US products from its tariffs list. Meanwhile, the US President Trump hinted that he would rather get a whole deal done with China rather than an interim deal.
Also, declining US crude inventories continue to lend support to the barrel of WTI. According to the latest US Energy Information Administration (EIA), the US crude oil stockpiles fell last week to the lowest in nearly a year to 416.1 million barrels, down 6.9 million barrels in the week to Sept. 6.
Attention turns towards the US Retail Sales, Michigan Preliminary Consumer Sentiment and Baker Hughes Rigs Count data for fresh direction on the prices.
WTI Levels to watch
- R3 58.6
- R2 57.44
- R1 56.26
- PP 55.1
- S1 53.92
- S2 52.76
- S3 51.58
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