WTI drops back towards weekly low past $90.00 on API stockpiles, Iran/OPEC news

• WTI takes offers to refresh intraday low, fades bounce off one-week bottom.
• API inventories registered surprise build, Russian media hints at no plans discussed to cut OPEC+ output.
• US-Iran oil deal, Iraq’s readiness for more oil supplies to Europe join recession fears, hawkish Fedspeak to exert downside pressure.
• China PMI, US ADP and EIA numbers to entertain traders ahead of the key NFP data.

WTI crude oil retreats to $91.75, after a failed attempt to consolidate the biggest daily loss in seven weeks, as recession woes and supply concerns weigh on the black gold during Wednesday’s Asian session. In doing so, the commodity prices remain pressured near the weekly low.

Recently exerting downside pressure on the energy benchmark is the weekly prints of the American Petroleum Institute’s (API) Crude Oil Stock data. That said, the weekly inventories for the period ended on August 26 rose to 0.593M versus -5.632M prior.

Elsewhere, the statements from Iraq's State Organization for Marketing of Oil (SOMO) eased supply crunch fears and weighed on the WTI crude oil prices late on Tuesday. Iraq’s SOMO unveiled plans to travel to Germany for oil export talks. “Iraq ready to boost oil exports to Europe, if asked,” adds Iraq’s SOMO.

On the same line could be the headlines from OPEC and its allies, the group known as OPEC+, which stated, per the Russian news TASS, “Potential OPEC+ output cuts not under discussion now.” Also weighing on the black gold prices were expectations that Iran may release more oil.

Furthermore, chatters surrounding the US-Iran oil deal appeared to have battled the oil bears.

It should be noted, however, that the fears of recession and hawkish central bank chatters exert downside pressure on the oil prices. Adding to the economic slowdown concerns are the latest US-China tension over Taiwan and China’s covid woes.

Alternatively, recently firmer US data and Gazprom’s halting of the gas supplies to Europe keep buyers hopeful.

Moving on, China’s NBS Manufacturing PMI for August, expected 49.2 versus 49.0 prior, could offer an intermediate rebound to the black gold. After that, the US ADP Employment Change for August, the early signal for Friday’s US Nonfarm Payrolls (NFP), expected 200K versus 128K prior, will be important to watch for fresh impulse.

Also read: ADP Jobs Preview: Three reasons to expect the data to drive the dollar higher

Technical analysis

A clear downside break of the previous resistance line from early July, around $90.00 by the press time, appears necessary to direct bears towards the monthly low near $85.50. Meanwhile, oil buyers need a successful break of the 50-DMA, around $96.00 by the press time, to retake control.