WTI crude oil prices refresh their daily low at around $96.50 during Monday’s Asian session. In doing so, the black gold justifies the market’s risk-aversion, as well as cautious sentiment ahead of this week’s meeting of the Organization of the Petroleum Exporting Countries (OPEC)and allies including Russia, a group known as OPEC+.
That said, OPEC’s defense of Russia’s membership in the OPEC+ group appeared to have recently favored the oil bears. During the weekend, OPEC Secretary General Haitham al-Ghais said Russia's membership in OPEC+ is vital for the success of the agreement.
Elsewhere, downbeat prints of China’s official NBS Manufacturing PMIs for July, to 49.0 versus 50.4 expected and 50.2 prior, join the fresh Sino-American tussles over Taiwan to roil the sentiment and exert downside pressure on oil prices. US House Speaker Nancy Pelosi begins her Asia visit but the schedule doesn’t mention her Taiwan visit The reason could be attributed to Beijing’s warnings. “Six people familiar with the Chinese warnings said they were significantly stronger than the threats that Beijing has made in the past when it was unhappy with US actions or policy on Taiwan,” said the Financial Times (FT).
Additionally, comments from Minneapolis Fed President Niel Kashkari and the Fed’s preferred inflation gauge appeared to have probed the greenback bears and challenged the oil’s rebound of late. “The fed is still a long way away from backing off rate hikes,” said Fed’s Kashkari to the New York Times (NYT). The policymaker added, “Hiking rates by half a point at coming Fed meetings seems reasonable to me.” Furthermore, the US Core Personal Consumption Expenditures (PCE) Price Index, the Fed's preferred gauge of inflation, rose to 4.8% YoY for June versus 4.7% prior.
On the same line, the “technical recession” in the US, as the Annualized readings of the US Q2 Gross Domestic Product (GDP) dropped for the second straight quarter, appeared to have also weighed on the energy benchmark.
While portraying the mood, the S&P 500 Futures print mild losses but the US Treasury yields consolidate a recent fall around 2.66%, up two basis points (bps).
Moving on, Wednesday’s OPEC+ verdict will be important for the WTI crude oil traders ahead of Friday’s US employment report for July. “Two of eight OPEC+ sources in a Reuters survey said a modest increase for September will be discussed at the Aug. 3 meeting, while the rest said output would likely be held steady,” said Reuters.
WTI sellers approach a two-week-old ascending triangle formation’s support, near $95.25 by the press time. However, July 25 swing low around $92.40 will be a confirmation point for the “double top” bearish pattern.
Alternatively, recovery remains elusive until the quote crosses the aforementioned triangle’s upper line, also the “double top”, near $100.80-$101.00.
© 2000-2024. All rights reserved.
This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.