- WTI crude oil clings to mild losses at fortnight high, prods two-day winning streak.
- US Weekly crude oil stockpiles mark multi-year high draw, Hurricane Idalia approaches Georgia after roiling Florida.
- China issues highest Typhoon warning for Saola as it approaches Hong Kong.
- Cautious mood ahead of Fed’s favorite inflation gauge, mixed China PMIs allow Oil price to consolidate weekly gains.
WTI crude oil lacks direction as it fluctuates between $81.30 and $81.40 ahead of Thursday’s European trading day, ending a two-day gain streak with modest losses. By doing this, the black gold ignores the severe inventory drawdown and supply-crunch concerns resulting from Hurricane Idalia, portraying instead the market’s cautious attitude in front of the crucial US inflation and employment cues.
#Oil attracts buyers above the $81.30 mark, US PCE eyed
Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around the $81.35 mark so far on Thursday.
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.#XAGUSD #crudeoil #dax18 #DowJones #forextrader pic.twitter.com/Eys5cfdIDM
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The weekly measure of the US crude oil inventories per the official source the Energy Information Administration (EIA) marked the biggest draw in four weeks after the industry source American Petroleum Institute (API) marked the largest fall since September 2016.
The buyers of WTI crude oil are also encouraged by worries about a supply shortage and increased energy demand as a result of Hurricane Idalia in the US and Typhoon Saola in China. “Hurricane Idalia plowed into Florida’s Gulf Coast on Wednesday with howling winds, torrential rains, and pounding surf, then weakened as it turned its fury on southeastern Georgia, where floodwaters trapped some residents in their homes,” according to Reuters.
Crude Oil (WTI) (V3) Intraday: the bias remains bullish.
Our preference: long positions above 80.80 with targets at 82.20 & 82.90 in extension.
Alternative scenario: below 80.80 look for further downside with 80.30 & 79.70 as targets.
Comment: even though a contin pic.twitter.com/9vkZJI9NpL
— Marketequity (@marketequityinc) August 31, 2023
On the other hand, China issued the highest typhoon warning on Thursday, per Reuters, as Typhoon Saola reached the southeastern coastline while challenging Hong Kong and other major manufacturing hubs in the neighboring Guangdong province.
Regarding the mood, the S&P 500 Futures find it difficult to keep up with Wall Street’s gains due to a cautious outlook before the important US data. The benchmark US 10-year Treasury note yields, however, are still under pressure and are currently at their lowest points in three weeks (4.11% as of press time).
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It should be noted that the black gold previously cheered the downbeat US Dollar and hopes of a sooner ending of the hawkish cycle at the major central banks including the Federal Reserve. However, the early-day mixed China data prod the Oil buyers ahead of the top-tier US statistics. That said, China’s official NBS Manufacturing PMI for August rose to 49.7 versus 49.4 expected and 49.3 previous readings whereas the Non-Manufacturing PMI came in as 51.0 compared to 51.5 prior and market forecasts of 51.1.
Looking ahead, the Fed’s preferred inflation gauge, namely the US Core Personal Consumption Expenditure (PCE) Price Index for August, expected to remain unchanged at 0.2% MoM but edge higher to 4.2% YoY from 4.1% prior, will be important for clear directions. Also, headlines about China and the natural calamities due to Idalia and Saola, as well as weather conditions in Europe, will offer a clear guide for the Oil traders.
No TTG End of Day Video for rest of week but here are some themes:
– A little whippier price action today, indices still gained over session & plenty of #trade oppty's
– US Dollar continues slide $DXY -0.3%
– Builders led ITB +1.4%
– Small Caps $IWM w/ most gains since open pic.twitter.com/oC3OLEk14F
— Christian Fromhertz 🇺🇸𝕏 (@_cfromherrtz) August 31, 2023
Despite the latest hesitance, the WTI crude oil buyers remain hopeful unless the quote stays beyond the 21-DMA level of around $80.90.