WTI Crude oil futures ended the last week 1.4% lower and closed at $90.77 per bbl, amid rising concerns of a global economic slowdown. Recession fears continue to spend pressure on energy markets, with Fed minutes a generating commitment to drop inflation to the 2% target range. U.S. crude stockpiles drop by 7.06 million barrels in the week ended 12th August, exports rise to a record and gasoline demand uprise to the highest this year.
Crude exports rise to a record as European refiners rushed to stock up the supplies ahead of a ban on Russian oil imports. Earlier last week, efforts to revive the 2015 nuclear deal that could boost Iranian oil exports by about 1.3 million bpd drove prices to hit six-month lows. MCX Crude oil August futures closed at Rs.7,221 per bbl, down by 1.8%.
A cut down of economic data including PMI and U.S. GDP are due this week. Any signs of weakness in the world’s top economies might further take a toll on oil prices. The slowdown in China due to ongoing power shortages and covid restrictions might further add to the downside.
The dollar index and U.S. treasury yields have been rising ahead of the Jackson hole symposium due this week, on expectations of some hawkish comments from Fed officials amid the backdrop of recent ease in financial conditions, making the Fed’s job tougher. The expectation of MCX Crude oil September futures to trade in the range of Rs 6,980 – 7,450 per bbl for the week.