Slowdown woes, surging US inventories drag WTI to four-week low

As a result of waning worldwide economic activity, as shown by the S&P worldwide PMIs, WTI crude oil declined to $77.68 per barrel, down 0.54%, before improving to $79.01 at the time of writing. While oil stockpiles decline by 6.1 million barrels, US petrol inventories increase by 1.5 million barrels, roughly twice as much as the estimates.

WTI traders’ suffering is prolonged as WTI descends to new four-week lows of $77.68 per barrel as a result of weaker global economic growth, according to S&P Global PMIs. There were obstacles for oil prices along with a decrease in US crude inventory. WTI is down 0.54%, trading at $78.90 per barrel.

Oil prices are under pressure as traders wait for Fed Powell’s upcoming speech for hints on monetary policy. S&P Global released global PMIs, which demonstrated that business activity in the industrial and service sectors is declining. The PMI decreased more than anticipated, primarily in Germany, according to reports from Japan, the Eurozone, the UK, and the US. The information hurt WTI since a slowdown in the global economy might reduce demand for oil.

According to data from the US Energy Information Administration (EIA), US petrol stockpiles increased by 1.5 million barrels, nearly double analysts’ predictions of a decline of 888K barrels. Additionally, US crude stockpiles last week fell by 6.1 million barrels to 433.5 million barrels.

Fuel demand hasn’t been very robust because of the challenging economic climate, despite refiners continuing to operate at a high rate and use oil stocks. A weak US currency, which is being hurt by declining US Treasury bond yields, is absorbing the decline in WTI. The US Dollar Index declines 0.24% to 103.346, which is positive for assets denominated in US dollar.

Market players get ready for Friday’s address by Federal Reserve Chair Jerome Powell. Investors anticipate the Fed to uphold its higher-for-longer pledge and downplay the likelihood of interest rate decreases.

The pair is depicted as going bullish as a golden cross appears, indicating that further upward movement is anticipated, in the US crude oil benchmark daily conversation. Additionally, Wednesday’s price action, which formed a hammer and was preceded by a downturn, provides WTI buyers with two signs to enter the market. To support the bias, though, a daily close above $80.00 per barrel is hoped.

The current week’s high of $82.13 and the year-to-date (YTD) high of $84.85 would be the first two points of resistance for WTI. On the other hand, sellers could push prices lower and threaten the convergence of the 50/200-day Simple Moving Average (DMA) at roughly $76.10/36 if WTI remains below $80.00.