The recovery attempts in WTI (oil futures on NYMEX) failed once again near 52.70 levels, sending the rates back below the midpoint of the 52 handle, as the bears fight back control amid unabated broad US dollar demand and looming China slowdown concerns.
The greenback extends its move higher versus its main competitors, reaching fresh monthly tops near 97.60 levels, as sentiment sours across the European markets following dismal Euro area flash manufacturing PMI readings. Downbeat PMI reports from the Euroland added to global growth concerns, especially after China reported a sharp drop in its retail sales and industrial figures. Note that China is the world’s No.2 oil consumer.
Moreover, mounting oversupply concerns coupled with doubts whether the OPEC output cuts would be able to stabilize the oil markets continue to remain a drag on the prices. Meanwhile, the focus now shifts towards the US drilling sector activity report that will be published by Bakers and Hughes oilfield Services Company for further trading impetus.