• WTI drops to $77.68 per barrel, down 0.54%, as S&P Global PMIs indicate weakening global business activity.
• US gasoline inventories rise by 1.5 million barrels, nearly double the estimates, while crude stockpiles fall by 6.1 million barrels.
• Soft US Dollar provides some cushion; DXY retreats 0.24% to 103.346 as market participants await Powell’s speech.

Western Texas Intermediate (WTI), the US crude oil benchmark traders, prolong their pain as WTI drops to new four-week lows of $77.68 per barrel, courtesy of weakening business activity worldwide, as reported by S&P Global PMIs. That, alongside a drop in US crude inventories, were headwinds for Oil prices. WTI trades at $78.90 per barrel, down 0.54%.

Oil prices pressured as investors eye Fed Powell’s upcoming speech for monetary policy clues

S&P Global revealed PMIs worldwide, which showed that manufacturing and business services activity is deteriorating. Japan, the Eurozone, the UK, and the US reported that PMI declined more than expected, mainly in Germany. The data weighed on WTI’s, as a global economic slowdown might dent oil demand.

US gasoline inventories rose 1.5 million barrels, almost double analysts’ estimates of an 888K barrels drop, according to data from the US Energy Information Administration (EIA). At the same time, US crude stockpiles plunged by 6.1 million barrels to 433.5 million barrels last week.

Sources cited by Reuters said, “While refiners continue to run at a high rate and snap up oil inventories, fuel demand hasn’t been very strong due to tough economic conditions.”

Cushioning WTI’s drop is a soft US Dollar (USD), undermined by falling US Treasury bond yields. The US Dollar Index (DXY), retreats 0.24%, at 103.346, a tailwind for USD-denominated assets.

Aside from this, market participants get ready for the Federal Reserve Chair Jerome Powell’s speech on Friday. Investors estimate the Fed would stick to its higher-for-longer commitment and talk down the chances of interest rate cuts.