OIL PRICE FORECAST:

• Oil Combined As we speak Following an Improved European and US session as Sentiment briefly improved.
• US Rig Depend for Week Ended August 18 Drops to 520 from a Earlier 525.
• Technicals Flashing Combined Indicators with Total Enchancment in Sentiment wanted for a Sustained Push Larger.
• To Study Extra About Worth Motion, Chart Patterns and Shifting Averages, Take a look at the DailyFX Schooling Part.

Free Information to Oil for Q3 Under Now

Most Learn: What’s OPEC and What’s Their Function in World Markets?

Oil costs completed final week robust with WTI placing in a achieve of round 1.7% on Friday, helped partially by a decrease rig rely within the US. This morning did see a quick continuation of the rally greater as issues round China had been largely drowned out by tighter provide dynamics as exports from Russia and Saudi Arabia decelerate.

US RIG COUNT AND CHINA CONCERNS

The Baker Hughes rig rely within the US for the week ending August 18 confirmed a decline from the earlier 525 to 520 in an indication manufacturing could also be slowing within the US. This comes on the again of stories final week of a surge in US oil exports which makes the print much more intriguing.

The atmosphere in China stays a key problem with a modest if uninspiring fee minimize from the PBoC did enhance sentiment a smidge within the London and Asian classes. The US open has seen the script considerably shift as danger belongings retreat and a stronger US Greenback seems to be dragging oil costs decrease as nicely.

A slowdown in China may have far reaching penalties for World Markets within the second half of 2023. The primary half of the yr noticed the Chinese language economic system largely underwhelm and but their oil purchases reached historic ranges as they appear to enhance stockpiling capabilities. Nonetheless, a slowdown may even see such purchases take a backseat from the Chinese language authorities and in tun this might trigger oversupply and proceed to maintain Oil costs comparatively subdued.

US DATA, RISK EVENTS AND JACKSON HOLE

The important thing heading to begin the week is more likely to be pushed by the Jackson Gap Symposium which kicks off on Thursday. As issues stand, we do not need loads on the calendar when it comes to danger occasions, however PMI information may play a job in oil costs this week as nicely.

The S&P world manufacturing flash PMI information may give Oil merchants some extra perception into the well being of the worldwide economic system. Clearly, a decline in manufacturing exercise may reinforce recession fears and push all decrease as soon as extra.

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TECHNICAL OUTLOOK AND FINAL THOUGHTS

From a technical perspective each WTI and Brent completed final week robust with value motion virtually similar of late. WTI for its half has tried a rebound and run into resistance simply above the $82.00 a barrel mark. We even have the 20-day MA which rests on the $81.32 a barrel mark which held agency to date as we speak.

WTI is offering combined alerts from a technical viewpoint as we appear primed for one more Golden Cross Sample because the 50-day MA eyes a cross above the 200-day MA. This chart sample is often a optimistic signal for bulls, even whether it is short-term.

Key Ranges to Hold an Eye On:

Help ranges:

• 80.00 (psychological stage)
• 79.15
• 77.50

Resistance ranges:

WTI Crude Oil Day by day Chart – August 21, 2023

Supply: TradingView

Brent Crude is starting to seem like a mirror picture of WTI with the MAs and value motion virtually shifting in sync on the minute.

IG Consumer Sentiment information tells us that 53% of Merchants are at present holding brief positions. the variety of merchants lengthy to brief are 1.12 to 1.

For a extra in-depth have a look at WTI/Oil Worth sentiment and the adjustments in lengthy and brief positioning, obtain the free information beneath.

Brent Oil Day by day Chart – August 21, 2023

Supply: TradingView

Written by: Zain Vawda, Market Author for DailyFX.com

Contact and observe Zain on Twitter: @zvawda