WTI trades lower around $84.80 after disappointing Chinese PMI
|- WTI Crude oil trades lower due to the reduction in the Chinese services economy.
- Market optimism buoyed by China’s fiscal measures has strengthened oil prices.
- OPEC+ is expected to extend production cuts through the end of 2023.
Western Texas Intermediate (WTI) Crude oil trades lower around $84.80 during the European session on Tuesday. The price of black gold is experiencing downward pressure due to the reduction in the Chinese services economy. China’s downbeat Caixin Services PMI for August declined to the reading of 51.8 from 54.1 prior.
The data report bolsters the fears about gloomy economic conditions in the world's second-largest economy, which weighs on Oil prices. However, the black gold cheered China's stimulus measures. Indeed, China's commitment to opening up its services sector, along with improvements in manufacturing, forms part of a comprehensive strategy to lower mortgage rates and infuse additional liquidity into the economy to support the prices of Crude oil.
Organization of the Petroleum Exporting Countries (OPEC) and its allies (OPEC+) are expected to extend production cuts through the end of 2023. Additionally, there is widespread expectation that Saudi Arabia, the world's leading oil exporter, will continue its voluntary reduction of 1 million barrels per day (bpd) for a fourth consecutive month into October.
Additionally, Russian Deputy Prime Minister Alexander Novak has announced that Moscow agrees with OPEC+ partners regarding the terms for ongoing output cuts in October. Investors expect more details to be revealed this week, seeking more cues on the deal.
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