WTI: Mildly offered near $72.00 as mixed Oil market news join economic fears
- WTI crude oil fades late Thursday’s corrective bounce amid mixed catalysts.
- Saudi Arabia hikes Oil price to Asia, Iran seizes allegedly smuggled fuel.
- Weekly EIA inventories suggest easy draw; risk-off mood weighs on commodities.
- US employment report, China news eyed for clear directions.
WTI crude oil prints mild losses near $71.80 amid a sluggish Friday morning in Asia. In doing so, the black gold aptly portrays the market’s cautious mood ahead of the all-important US employment data, especially amid catalysts surrounding the energy markets.
Talking about the negatives first, the market’s risk-off mood, backed by the fears of higher rates and strong yields, as well as recession woes, weighs on the WTI crude oil price. That said, the market’s risk aversion escalates as mostly upbeat US jobs data underpin hawkish Fed bets, even as recession fears loom and the China-linked headlines aren’t impressive. Additionally, the US-China tension is an extra burden for the sentiment, which in turn exerts additional downside pressure on the black gold.
Elsewhere, a lesser than previous draw of the weekly Oil inventories, as per the US Energy Information Administration (EIA), also keep the Oil bears hopeful. That said, EIA Crude Oil Stocks Change improved to -1.508 million barrels (M) for the week ended on June 30 versus -9.603M in previous readings.
Alternatively, a fresh round of oil production cuts from top oil exporters Saudi Arabia and Russia join the increase in Saudi Arabia’s official selling prices (OSP) for August-loading Arab Light to Asia to favor the Oil buyers. The news suggests the increase in price by $0.20 per barrel to $3.20.
On the same line, Iran's Revolutionary Guards seized a tanker holding 900 metric tons of "smuggled fuel" and 12 crew members based on a court order, a report by the semi-official Fars news agency said on Friday, reported Reuters.
Against this backdrop, Wall Street closed in the red and the US Treasury bond yields refreshed a multi-day high, before retreating a bit.
Moving on, Oil traders will pay attention to the US Nonfarm Payrolls (NFP), expected to ease to 225K from 339K, for clear directions. Should the jobs report arrive as positive, the US Dollar can witness further upside, which in turn can favor the commodity sellers.
Technical analysis
Thursday’s Gravestone Doji bearish candlestick below the one-month-old resistance line, around $72.05 by the press time, keeps WTI crude oil sellers hopeful of retesting the 21-DMA support surrounding $70.30.