Pre Open US - US Oil 28 Aug 2023

China's move to boost its struggling economy had a limited impact on oil prices, which remained largely steady. Concerns about the pace of economic growth and potential US interest rate hikes that could weaken demand persisted. To stimulate struggling markets, China halved the stamp duty on stock trading. Attention also turned to Tropical Storm Idalia, which posed a potential threat to oil and gas production in the US Gulf.

Tropical Storm Idalia was strengthening as it approached Cuba, potentially causing power outages, which could lend short-term support to oil prices despite the hawkish stance of the Federal Reserve on rate hikes.

Oil prices, supported by decreasing oil inventories and production cuts from the OPEC+ alliance, remained above $80 per barrel. Saudi Arabia was anticipated to extend its voluntary 1 million barrels per day oil output reduction into October, aiming to provide continued market support.

The WTI price touched the support level near 77.50 and is now rebounding. The level at 81, where the 100MA has acted as a resistance for the past 2 instances on the 4-hour chart, might continue to do so. If there's a breakout above that level, the next target could be 82.50.