Pre Open US - US Oil 16 Aug 2023

Oil prices showed little change on August 16 as investors balanced worries about China's struggling economy with expectations of reduced supply in the US. Brent crude futures slipped 7 cents to $84.82 a barrel, while US West Texas Intermediate (WTI) crude dropped 8 cents to $81.91 a barrel. Both benchmarks had fallen over 1% in the previous session, reaching their lowest points since August 8.

China's economy is causing concern due to disappointing retail sales, industrial output, and investment figures. This has raised worries about a prolonged growth slowdown. The country's central bank made a minor interest rate cut in response, but analysts consider it insufficient to have a meaningful impact. The OPEC+ group and the International Energy Agency are looking to China to boost crude demand for the remainder of 2023, but skepticism about this is growing.

US crude stocks decreased by approximately 6.2 million barrels the previous week, a larger reduction than the 2.3 million expected by Reuters-polled analysts. US government inventory data is scheduled for later on the same day. The oil market's fourth-quarter outlook depends on China's macroeconomic situation, with Saudi Arabia and Russia's supply cuts having boosted oil prices recently.

From a technical standpoint, WTI is corrected, and the next support levels are the area between 80 and 79.