Crude Down As Market Worries About Demand, US Stocks Lower

Oil prices were lower as tighter supply has already been priced in and demand worries resurface, especially from China, the world’s largest crude importer. The stronger dollar and higher US yields also weighed on oil with the USD index up 0.3%.

• WTI fell 0.6% to close below $80 at $79.65/bbl. It has started Wednesday steady at $79.66. It reached a high in the European afternoon of $80.37 but then fell to a low of $79.46 during the NY session. Support is at $78.33, August 3 low, and resistance is the bull trigger at $84.16, August 10 high.
• Brent fell 0.7% to $83.88/bbl close to the low of $83.85. It spent most of the day above $84 with a high of $84.66. Support is at $82.36 and resistance $88.10.
• Bloomberg is reporting that API data showed US crude inventories fell a further 2.4mn barrels in the latest week, according to people familiar with the data. Gasoline rose 1.9mn but distillate fell 153k.
• While the API data showed further tightening of supply in the US, news on this front was generally more mixed. Turkey and Iraq are yet to agree on terms to reopen Iraqi shipments through Ceyhan port. But August US seaborne exports are expected to be their highest since March and Norway’s July oil output recovered to its highest in four months, according to NPD data. Iran’s shipments have also risen strongly.