Fundamental analysis
28 August, 2023
WTI price is regaining ground but is still below $80.00 in early European trading on Friday at 80.03. WTI posted a second week of losses on Friday after Fed Chair Jerome Powell said the US central bank may need to raise rates further to cool still-too-high inflation. Oil rose in early Asian trade before paring gains, as China’s move to halve stamp duty on stock trading to boost struggling markets temporarily pushed up prices. In the United States, energy firms cut the number of active oil rigs for a ninth month in August, Baker Hughes said in a report. Also, Tropical Storm Idalia has formed in the Caribbean and could strengthen into a hurricane and hit Florida. The hurricane is forecast to miss oil and gas centres in the Gulf and the most likely impact is a day or two of power outages according to experts. That should see some short term support for the oil price. However, the narrative of tightening supply, mainly on the back of falling oil inventories and supply cuts by the OPEC+ collective of oil producers, has been eroded by prospects of easing sanctions on Iran and Venezuela, ANZ Research said in a note on Monday.
