Crude oil prices retreated nearly one and half percent today amid cautious trade ahead of potentially gloomy manufacturing data and an annual meeting at Jackson Hole, central bankers including from the United States will talk about interest rates.
Markets await clues on the outlook for interest rates when Federal Reserve officials and policy makers from the European Central Bank, the Bank of England and the Bank of Japan head to Jackson Hole, Wyoming, for an annual meeting later this week.
Earlier today, Japan released its factory activity which remained subdued for a third straight month in August.
On the supply side, members of the Organization of the Petroleum Exporting Countries and its allies have opted to curb supplies to buoy prices, with Saudi Arabia cutting output by another 1 million barrels per day (bpd) from July through September. Russia plans to reduce exports in August by 500,000 bpd.
Today, The weekly report from the Energy Information Administration, the statistical arm of the U.S. energy department, is due at 8.00pm, while U.S. PMI numbers at 7.15pm and 7.30pm will drag volatility in the prices.
PMI numbers forecasting to stay below from the previous number, if it than prices may extend recent fall or vice a versa.
Technical Outlook
Since 28 July 2023, Crude oil has turned negative, and gave up 5.50%. Today, prices traded at 6512, down 1.92%.
Formation of long bearish candlestick on the chart indicates that bearish momentum will continue. However, it would need to break below 6490 in order to test 6420-6350.00. Alternatively, any rise towards 6650-6700 could attract near future selling activities.
On the upside, massive resistance is seen at 6880 and above it only prices may retest its next resistance 6950-7000.