Trending Articles- Gold Price Forecast: Gold May Break $4,500 as Fed Rate-Hike Expectations Continue to Cool
- Gold gains momentum to near $4,400 as Fed hike expectations drop despite Us-Iran tensions
- Gold Price Forecast: Will Gold Rise or Fall in the Short Term as Fed July Minutes Approach?
- Forex Today: US Dollar stabilizes ahead of next batch of US data
- Australian Dollar gains as US Dollar struggles amid fading Fed rate hike bets
- WTI declines below $82.50 as oil inventories rise far more than expected
WTI prices remain subdued near 68.37, the lowest level since December 2023, which was recorded on Thursday.
Crude Oil prices lost ground due to demand fears in the United States and China.
EIA Crude Oil Stocks Change fell by 6.873 million barrels, against the expected decline of 0.9 million barrels.
West Texas Intermediate (WTI) Oil price trades around $68.60 during the Asian hours on Friday, hovering around 68.37 lowest since December 2023, which was recorded on Thursday. Crude Oil prices depreciate due to concerns over demand in both the United States (US) and China.
The US ISM Manufacturing PMI indicated that factory activity contracted for the fifth consecutive month, with the pace of decline slightly exceeding expectations. Additionally, the world's biggest crude importer China showed that manufacturing activity fell to a six-month low in August, with factory gate prices dropping significantly.
On Thursday, the US Energy Information Administration (EIA) reported a Crude Oil Stocks Change, which reduced by 6.873 million barrels of crude Oil inventory for the week ending August 30. This was significantly larger than the market's expectation of a 0.9 million-barrel decrease, following the prior reduction of 0.846 million barrels.
The downside of the Oil prices would be restrained due to ongoing discussions between the Organization of the Petroleum Exporting Countries and its allies led by Russia (OPEC+), regarding a delay in planned output increases set to begin in October. According to Reuters, OPEC+ decided to postpone the scheduled Oil output increase for October and November and indicated that further delays or reversals of the hikes could be considered if necessary.
WTI prices may find support from the dovish comments made by Federal Reserve (Fed) officials, which enhance the chances of an aggressive rate cut by the Fed in September. Lower borrowing costs could stimulate economic activity in the United States, potentially boosting Oil demand.
Chicago Fed President Austan Goolsbee said on Friday that the longer-run trend of the labor market and inflation data justify the Fed easing interest-rate policy soon and then steadily over the next year. FXStreet’s FedTracker, which gauges the tone of Fed officials’ speeches on a dovish-to-hawkish scale from 0 to 10 using a custom AI model, rated Goolsbee’s words as neutral with a score of 3.8.
According to the CME FedWatch Tool, markets are fully anticipating at least a 25 basis point (bps) rate cut by the Federal Reserve at its September meeting. The likelihood of a 50 bps rate cut has risen to 41.0%, up from 30.0% a week ago.
Read more
* The content presented above, whether from a third party or not, is considered as general advice only. This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.
