WTI surges despite Chinese economic fears

WTI has surged despite Chinese economic fears, trading near $80.00 and at $79.94 per barrel. The fragile Chinese economic situation limits upside potential, but markets are monitoring potential supports from the Chinese government.

Oil prices managed to maintain momentum despite the fragile real-estate sector and the plummeting Evergrande’s stock. The US central bank’s actions may support the local economy, but the black gold may see further downside as Chair Powell expects the US economy to cool down and maintain rates until inflation shows deceleration.

The World Interest Rates Probabilities show a 90% probability of a no-hike rate hike in the September 20, 2023 meeting, with a 70% likelihood of a 25bps hike in November. This anticipated rate hike trajectory would result in a target rate of 5.75%. The daily chart analysis suggests a neutral to bullish outlook for WTI, with bulls gaining strength, but challenges persist.

The Relative Strength Index indicates positive momentum, while the Moving Average Convergence (MACD) presents lower red bars. The pair is below the 20-day Simple Moving Average (SMA) but above the 100 and 200-day SMAs, highlighting the continued dominance of bulls in the broader perspective.