WTI treads waters near $91.00 with a negative bias, awaits US Core PCE

• Crude oil prices struggle to retrace the recent losses ahead of US Core PCE.
• Russia will maintain its ban on petroleum exports until the domestic market stabilizes.
• US Dollar weakens due to downbeat US Treasury yields.

Crude oil prices struggle to recover from recent losses due to market caution on the Fed’s interest rates trajectory, which impacts economic activities. The higher interest costs raise borrowing costs, which can affect the demand for Crude oil.

Western Texas Intermediate (WTI), the US crude oil benchmark trades around $90.90 per barrel during the early European session on Friday.

American Petroleum Institute (API) reported on Wednesday that US crude oil inventories increased by 1.586M barrels for the week ending September 22, swinging from the previous decline of 5.250M barrels.

EIA Crude Oil Stocks Change data on the week ending September 22 showed that stocks decreased by 2.170 million barrels compared with the 2.135 million drawdowns seen a week earlier. Markets expected Oil stockpiles to decline by a much lesser 0.32 million barrels.

Crude oil prices experienced a significant surge over the week, reaching levels that surpass one-year highs. This upward movement is attributed to ongoing signs of a tightening global supply by Saudi Arabia and Russia.

Russia has announced that its ban on petroleum exports will be maintained until the domestic market stabilizes. Moreover, there has been no discussion with OPEC+ regarding a potential increase in supply to offset this export ban.

Additionally, the sense of optimism regarding an economic recovery in China, the largest oil importer globally, could support the demand for liquid gold.

The US Dollar Index (DXY) continues to weaken, trading lower around 105.80. The volatility in US yields could affect the Greenback. The yield on the 10-year US Treasury bond stands at 4.54%.

US Gross Domestic Product (GDP) remained consistent at 2.1% as expected. Initial Jobless Claims for the week ending on September 22, improved to 204K from the 202K prior, falling short of the 215K expected.

US Pending Home Sales showed a decline of 7.1%, exceeding the market expectation of a 0.8% fall, swinging from the 0.9% rise previously.

Chicago Fed President Austan Goolsbee has expressed confidence in the Federal Reserve's (Fed) ability to bring inflation back to its target. Goolsbee also highlighted the unique opportunity to achieve this without a recession, emphasizing the Fed's commitment to managing inflation while sustaining economic growth.

Moreover, Richmond Fed President Thomas Barkin noted that recent inflation data has been positive but cautioned that it is too early to predict the future course of monetary policy.

Traders await the release of the US Core Personal Consumption Expenditure (PCE) Price Index, the Fed's preferred measure of consumer inflation, scheduled for Friday. The anticipated reduction in the annual rate from 4.2% to 3.9% will be closely watched by market participants for its potential impact on the US Dollar.