Futures on US West Texas Intermediate Crude Oil retreated on Thursday, following a series of weak macro data from major economies and ahead of a highly anticipated speech by Federal Reserve Chair Jerome Powell tomorrow, which could offer interest rate guidance.
The latest manufacturing purchasing managers’ index surveys indicated a rather shaken health of major economies worldwide, which brought forth concerns over demand.
Japanese factory activity decreased for a third consecutive month in August, while business activity in the Euro Area shrank more than anticipated, most notably in Germany.
UK economy was likely on course for contraction in the third quarter, as manufacturing output slumped and broader weakness was observed amid higher interest rates.
And, US private sector activity in August has been the weakest since February, data showed, as a deepening contraction in the manufacturing sector came along with slower growth in services sector activity.
According to Sugandha Sachdeva, executive director and chief strategist at Acme Investment Advisors, the oil market has faced downward pressure mostly because of concerns over a potentially lower demand and rising supply on top of downbeat PMI figures.
With regard to supply, Iran’s oil minister told state media the nation’s crude production would reach 3.4 million barrels per day by the end of September despite US sanctions.
In the US, crude oil stockpiles decreased by 6.135 million barrels in the week to August 18th, the Energy Information Administration reported, compared with market consensus pointing to a larger draw – by 2.85 million barrels.
However, gasoline inventories increased by 1.467 million barrels last week, confounding expectations of a 0.888 million barrel drop.
Market focus now sets on the Federal Reserve’s Jackson Hole symposium for hints regarding interest rates.
As of 8:06 GMT on Thursday WTI Crude Oil Futures for October delivery were losing 0.65% to trade at $78.38 per barrel.
At the same time, Brent Oil Futures for October delivery were retreating 0.52% on the day to trade at $82.78 per barrel.
“Given the significant resistance point at $83 per barrel for WTI crude, we anticipate that oil prices will continue to trade with a negative bias,” Acme Investment Advisors’ Sachdeva was quoted as saying by Reuters.
“It is likely that prices may witness some rebound, but seem on course to test lower levels of around $74 per barrel in the near term.”
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
