WTI flirts with multi-month high, trades near $79.50 ahead of US PCE

• WTI edges higher near $79.50, the highest level since mid-April. 
• The Gross Domestic Product (GDP) data indicates that the US economy is still robust. 
• Saudi Arabia is anticipated to extend its 1 million-barrel oil supply cut into September. 
• Traders will focus on the US data, OPEC+ group’s Joint Ministerial Monitoring Committee (JMMC) on August 4.

Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around the $79.40 mark so far in the Asian session. WTI prices gains momentum on Friday, bolstered by upbeat US economic data and signs of tighter supply.

That said, the Gross Domestic Product (GDP) data indicates that the US economy is still robust amid the Federal Reserve (Fed) tightening monetary policy cycle. The US Bureau of Economic Analysis (BEA) showed on Thursday that the real Gross Domestic Product (GDP) rose at an annualized rate of 2.4% in the second quarter. This number followed the first quarter’s 2% growth rate and was above the market’s estimated 1.8% by a wide margin.

Meanwhile, the GDP Price Index declined to 2.6% from 4.1% in the first quarter, and the Core Personal Consumption Expenditures dropped to 3.8% from 4.9% in the same period.

WTI has edged higher for four consecutive weeks, with supplies projected to tighten due to curbs by the Organisation of Petroleum Exporting Countries (OPEC) and allies such as Russia, known as OPEC+. The agreement by OPEC+ to limit supply through 2024 was announced in April and brings the total announced output reductions to over five million barrels per day (bpd), or approximately 5% of global oil production.

Additionally, Saudi Arabia is anticipated to extend its 1 million barrel oil supply cut into September after it was previously extended into August, according to experts and traders surveyed by Bloomberg.

On the other hand, the US Energy Information Administration (EIA) reported that US crude inventories decreased by 600,000 barrels in the week ended July 21, compared to forecasts of a 2.35 million barrel decrease. This report sparked concerns about US summer travel demand.

Looking ahead, oil traders will focus on the US Core Personal Consumption Expenditure (PCE) index, the Fed’s preferred inflation gauge, due later in the North American session. The inflation figure is expected to drop from 4.6% to 4.2% annually. Next week, the focus will be on the OPEC+ group’s Joint Ministerial Monitoring Committee (JMMC), scheduled for August 4. This key event could significantly impact the USD-denominated WTI price.