Crude Still Under Downward Pressure Ahead Of PMIs & Jackson Hole

Oil prices are off today’s lows to be little changed as global demand worries continue to weigh on benchmarks. Brent is little changed at $76.02/bbl after a low of $75.77, key support is at $75.05. WTI is down 0.2% to $71.80 after a low of $71.58, briefly below the bear trigger at $71.67 again. Algorithmic selling has exacerbated downward pressures. If they continue, OPEC may abandon plans to reduce output cuts from October. The USD index is slightly higher.

• There was an 818k downward revision to US payrolls announced Wednesday and the FOMC July minutes signalled that it is looking at cutting rates at its September 18 meeting. These have added to market nerves regarding the strength of the US economy at a time of disappointing growth in China.
• Despite concerns over US demand, EIA data showed another crude drawdown of 4.65mn barrels last week, and gasoline stocks fell 1.61mn and distillate 3.3mn. Crude inventories are down 34.7mn barrels since the start of July to their lowest level since the end of January.
• There is no update on Gaza ceasefire negotiations.
• Later the Jackson Hole Symposium starts but markets will be waiting for Fed Chair Powell’s speech on Friday. The ECB July meeting account is published today and US/European August flash PMIs as well as US jobless claims and Chicago & Kansas indices are out.