Pre Open US - US Oil 23 Aug 2023

Oil prices experienced a decrease of more than 1.5% due to concerns about a global decline in manufacturing. This decline occurred just before the annual central banking meeting in Jackson Hole, US. Economic challenges were evident worldwide, as indicated by various Purchasing Managers' Index (PMI) surveys. Japan witnessed its factory activity shrinking for the third consecutive month, while Eurozone business activity, especially in Germany, fell short of expectations. The US PMI data was still awaited, and analysts were closely observing discussions among central bank officials at the Jackson Hole event to gain insights into potential changes in interest rates. Moreover, US crude stocks saw a reduction of approximately 2.4 million barrels. Additionally, the potential restart of a major pipeline in northern Iraq has brought up the possibility of an extra 500,000 barrels per day entering the market. It has been reported that oil exports are also resuming through the Ceyhan terminal.

The daily WTI price movement has given rise to a head and shoulders reversal pattern. Currently, there's a breakout occurring below the critical support level at 79, driving the price towards the projected target of 77.