WTI surges above the $81.00 mark amid the hope of a Chinese big fiscal stimulus

• WTI Prices edge higher to $81.00, gaining 0.41% on the day.
• More evidence of the Chinese economic deterioration, hawkish comments from Fed might weigh on the black gold.
• Oil traders will monitor Chinese big fiscal stimulus, global PMIs, Federal Reserve (Fed) Chairman Jerome Powell Speaks.

Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around the $81.02 mark so far on Monday. WTI prices post modest gains for the third consecutive day. However, WTI prices mark the ending of their longest weekly rally of 2023 amid the possible further tightening of monetary policy by the Federal Reserve (Fed) and China’s economic woes. About the data, Baker Hughes revealed on Friday that the total number of active rigs in the US declined by 12 last week.

The fear of China’s debt crisis and real-estate woes deepen risk aversion and drags WTI prices lower. Last week, China’s second-largest real estate company, Evergrande, filed for bankruptcy in a US court under Chapter 15. Additionally, the Chinese House Price Index for July decreased to -0.1% from 0% prior. This report adds the concern of a potential Chinese property catastrophe. Market participants will focus on the headline surrounding China’s economic woes and more evidence of the nation’s economic deterioration might weigh on the black gold.

Furthermore, the minutes of the FOMC highlighted that inflation remained unacceptably high and the officials see considerable inflationary concerns. Fed policymakers added that further rate rises may be required to bring inflation to the target and future rate decisions will be dependent on incoming data. It’s worth noting that higher interest rates raise borrowing costs, which can slow the economy and diminish oil demand.

On the other hand, the hope for the Chinese additional stimulus plan might cap the downside for WTI prices. The People’s Bank of China (PBOC) reported on Sunday that China would arrange financial support to resolve local government debt worries, according to Reuters.

Moving on, oil traders will closely watch the development of Chinese big fiscal and risk sen sentiment remains the main driver for WTI prices. Later this week, the Global Purchasing Managers’ Indexes (PMI) data and the Federal Reserve (Fed) Chairman Jerome Powell Speaks at the Jackson Hole Symposium will be in the spotlight. 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.