WTI gains momentum above $83.20 ahead of Chinese PMI, US NFP

• WTI prices gain traction for four straight days above $83.20 a barrel. 
• Russian authorities agreed to cut oil production and will reveal the new parameters next week. 
• Higher WTI prices are also bolstered by the big draw in US crude oil inventories.
• Oil traders will monitor the Chinese Caixin Manufacturing PMI, US Nonfarm Payrolls. 

Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around the $83,20 mark so far on Friday. WTI prices trade in positive territory for the fourth consecutive day on expectations that oil production cut by by Saudi Arabia and OPEC+ will continue through the end of 2023.

On Thursday, Russia’s Deputy Prime Minister Alexander Novak stated that the country agreed with OPEC+ to cut oil production and will reveal the new parameters next week, according to Reuters. That said, Russia is anticipated to cut oil exports by 500,000 barrels per day in August and by 300,000 barrels per day in September. While Saudi Arabia is expected to extend a voluntary oil cut of 1 million barrels per day for the third month in a row into October. This, in turn, boosts WTI prices to the highest level since April. 

Higher WTI prices are also bolstered by the big draw in US crude oil inventories. On Wednesday, the Energy Information Administration (EIA) showed that crude oil stocks declined by 10.584M barrels in the week ending August 25, better than the expectation of a -3.267M barrels drop. On the same line, the American Petroleum Institute (API) reported that US crude oil inventories dropped by about 11.486M barrels compared to the previous week’s -2.418M barrels, marking the largest decline since September 2016.

On the other hand, concerns about the economic slowdown in China might limit the WTI’s upside potential as China is the world’s largest oil importer. August’s Chinese Caixin Manufacturing PMI will be monitored closely by market participants. The weaker-than-anticipated data may exert additional selling pressure on WTI.

Apart from the Chinese data, oil traders will shift their attention to the US ISM Manufacturing PMI, Nonfarm Payrolls (NFP), and the Unemployment Rate due later on Friday in the American session. 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.