Oil prices slipped on Friday, on track for a weekly loss, as investors’ focus shifted to lacklustre demand and ample fuel supplies, offsetting support from a weak dollar. The volume of crude arriving in China, the world’s largest crude importer, is set to slow in September after rising for five straight months as its refiners gradually digest bloated inventories, according to data on Refinitiv Eikon. In the United States, refiners awashed in diesel inventory are unlikely to boost output soon. Soft margins are likely to cap further crude rallies and we anticipate further run cuts this fall to expedite the rebalancing of product stocks.
WTI Oil futures cut losses after testing one month low but slipped in Asia today as equities tanked. The counter and currently trades at $41 per barrel, down 1% on the day. Economic cues were supportive yesterday, triggering some buying after deep losses this week. The ISM said its US services PMI dipped to 56.9 in August from 58.1 in July, though a reading above 50 still indicates growth in the service sector. The US Labor Department said initial jobless claims declined to 881,000, a decrease of 130,000 from the previous week’s revised level of 1.011 million. China’s services sector grew strongly in August as businesses continued to recover from the coronavirus pandemic, survey data from IHS Markit showed Thursday. The Caixin services PMI fell marginally to 54.0 from 54.1 in July. A score above 50 still indicates expansion. The latest uptick extended the current sequence of growth to four months, signaling that the sector continued to recover from the marked drops in activity earlier in the year following the Covid-19 outbreak. New orders increased while sales were also elevated on strong domestic demand. The composite output index rose to 55.1 in August from 54.5 in July.
TREND : WEAK BEARISH / SIDEWAYS
Time : 04/09/2020
Pivot : 40.91
Technical View : LONG ABOVE 41.11
Target : 41.31, 41.75, 42.34, 43.03
Technical View : SHORT BELOW 40.71
Target : 40.51, 40.70, 39.48, 38.79