WTI remains under pressure below the $80.00 mark, eyes on US PMI
- WTI trades in negative territory for the third consecutive day.
- China’s economic woes exert selling pressure on WTI prices.
- Oil traders await US PMI, the Federal Reserve (Fed) annual economic symposium at Jackson Hole.
Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around the $79.65 mark so far on Wednesday. WTI prices remain under selling pressure amid the fear of the Chinese demand outlook
The fear of China’s debt crisis and real-estate woes drags WTI prices lower. On Monday, the People's Bank of China (PBoC) slashed its Loan Prime Rate (LPR) for one year by a smaller margin than anticipated. Chinese central bank decided to cut the one-year Loan Prime Rate (LPR) by 10 basis points (bps) to 3.45% from 3.55% and maintained the five-year LPR unchanged at 4.2%. Chinese authorities said on Sunday that China would arrange financial support to resolve local government debt worries. However, the lack of development about stimulus measures could trigger some follow-through selling in WTI prices as China is the major oil consumer in the world.
Furthermore, the American Petroleum Institute (API) reported on Wednesday that US crude oil inventories in the week ending of August 18 totaled -2.418M barrels compared to the previous week’s -6.195M.
Iraqi and Turkish oil ministers have addressed the significance of restoring oil shipments after concluding pipeline work. Market participants will monitor if Iraq exports through the Ceyhan oil terminal would resume, which would alleviate supply constraints.
Looking ahead, oil traders will keep an eye on EIA Crude Oil Stocks Change for the week ending August 18 and S&P Global PMIs due on Wednesday. Later in the week, attention will turn to the Jackson Hole annual symposium on Thursday and Fed Chair Powell's speech on Friday. These events could significantly impact the USD-denominated WTI price. Oil traders will take cues from the data and find trading opportunities around the WTI price.