WTI pares weekly loss above $80.00 on China, OPEC+ concerns

WTI crude oil renews intraday high near $80.20, following a gap-up start to the week, as traders await this week’s bumper data/events. In doing so, the black gold cheers the return of Chinese traders after a week-long Lunar New Year (LNY) holiday, as well as optimism surrounding a China-inspired boost to the energy demand.

Chinese traders are up for returning to the table after one week off and have already signaled readiness to boost consumption. Chinese tax authority mentioned that the week-long Lunar New Year holiday that ended on Friday propelled consumption by 12.2% from the same period last year. Furthermore, China's cabinet said on Saturday it would promote a consumption recovery as the major driver of the economy and boost imports, state broadcaster CCTV reported per Reuters.

On the other hand, Reuters quoted anonymous sources to mention that the Joint Ministerial Monitoring Committee (JMMC) of the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, known collectively as OPEC+, are unlikely to recommend any changes to oil output policy on February 01 meeting.

Apart from the OPEC+ and China concerns, the recently increasing odds of the Federal Reserve’s (Fed) nearness to the policy pivot also adds strength to the WTI crude oil. During the last week, the better-than-expected fourth-quarter (Q4) Gross Domestic Product (GDP) and the Core Personal Consumption Expenditures (PCE) Price Index for December gained major attention. However, the actual releases were softer than their previous outcomes and hence signaled that the Federal Reserve’s (Fed) front-loading of interest rates has finally helped exert downside pressure on spending and inflation fears.

However, the cautious sentiment ahead of the Fed meeting, OPEC+ JMMC verdict and the US employment data for January, not to forget China’s official activity numbers for January, seem to probe the Oil buyers.

Technical analysis

Although the 20-DMA puts a floor under the WTI crude oil prices near $78.70, the upside moves remain elusive unless crossing a two-month-old descending resistance line, close to $82.50 by the press time.