WTI inches lower to near $77.40 despite a threat of oil supply disruption, Chinese data

West Texas Intermediate (WTI) oil price retraces its recent gains despite an escalated situation in the Middle East. The WTI oil price inches lower to near $77.40 per barrel during the Asian session on Wednesday. US President Joe Biden has stated that the United States (US) will respond appropriately to a given situation after an attack on a US post in Jordan, and there is a possibility of a tiered approach which implies a strategy involving different levels or stages of actions.

On the positive side, Iran-aligned Iraqi armed group Kataib Hezbollah, suspected of being involved in the deadly drone attack on US troops near the Jordan-Syria border, has declared the suspension of all its military operations against the US military in the region.

Crude oil prices may experience a positive impact following the recent update on global economic growth by the International Monetary Fund (IMF). The IMF has revised its forecast, indicating expectations of stronger growth, particularly in the economies of the United States and China. Furthermore, the Chinese monthly Non-Manufacturing Purchasing Managers' Index (PMI) indicated an improvement in the performance of China's service sector for January arrived at 50.7, slightly surpassing the expected figure of 50.6. While, the Manufacturing PMI reached 49.2, meeting the anticipated value and advancing from the previous reading of 49.

The American Petroleum Institute (API) released the US Weekly Crude Oil Stock data on Tuesday for the week ending January 26, showing a decrease of 2.50 million barrels. This marks a larger decline than the expected decrease of 0.867 million barrels, and it's an improvement from the previous week's decline of 6.674 million barrels. The Energy Information Administration (EIA) is anticipated to release improved Crude Oil Stocks Change figures on Wednesday. In addition to the oil market indicators, market participants will closely watch the Federal Reserve's (Fed) activities for further insights into the US economic landscape.