WTI holds above the $85.10 mark ahead of the Chinese Services PMI
- WTI prices are bolstered by the falling crude oil inventories, oil production cut by Russia and Saudi Arabia.
- The concerns about the economic slowdown in China might limit the further upside in WTI.
- Oil traders will monitor the Chinese Caixin Services PMI, the US ISM Services PMI due later this week.
Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around the $85.20 mark so far on Monday. The falling crude oil inventories and the expectations of oil production cut by Saudi Arabia and OPEC+ boost WTI prices near the Year-To-Date (YTD) high of $85.52.
Higher WTI prices are also supported by a substantial drop in US crude oil stocks. The Energy Information Administration (EIA) reported last week that crude oil stockpiles fell by 10.584 million barrels in the week ending August 25, above expectations of a -3.267 million barrel decrease.
Furthermore, according to Reuters, Russia's Deputy Prime Minister Alexander Novak said that the nation agreed with OPEC+ to limit oil output and would unveil the new parameters later this week. Nonetheless, Russia is expected to cut its oil exports by 500,000 barrels per day in August and 300,000 barrels per day in September. While Saudi Arabia is anticipated to prolong its voluntary oil cut of 1 million barrels per day into October for the third month in a row. In response to the news, WTI prices reached a YTD high on Friday.
On the other hand, Moody’s stated on Friday that the Global rating agency expects China’s economy to grow at the same rate of 5.0% in 2023 as expected earlier. However, the global rating company also downwardly revised its 2024 GDP for China to 4.0% from 4.5%, according to Reuters. The concerns about the economic slowdown in China might limit the WTI's upside potential as China is the world's largest oil importer.
Moving on, oil traders await the Chinese Caixin Services PMI for August and the US ISM Services PMI due on Tuesday and Wednesday, respectively. Also, traders will take cues from the EIA Crude Oil Stocks Change data for the week ending September 1 due on Wednesday. These events could significantly impact the USD-denominated WTI price. Oil traders will take cues from the data and find trading opportunities around the WTI price.