WTI trims intraday gains above $75.00, eyes on US GDP data

Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around $75.15 on Thursday. WTI prices edge lower 0.37% on the day amid renewed US Dollar (USD) demand. However, a slump in US crude output, new Chinese stimulus measures, and geopolitical tensions might cap the downside of the black gold.

According to the Energy Information Agency's (EIA) weekly report on Wednesday, US crude oil inventories fell by 9.233M barrels for the week ending January 19 from the previous reading of 2.493M barrels drop. A winter storm hit US oil output last week, particularly in North Dakota, the third-largest crude-producing state in the US.

The People’s Bank of China (PBoC) will cut the amount of cash that banks are required to hold as reserves from February 5, the biggest cut for more than two years. This measure is likely to strengthen a fragile economic recovery. This, in turn, might boost WTI prices as China is the world’s largest oil importer. 

Meanwhile, the geopolitical risk in the Red Sea is largely already factored into prices. The United States and UK have conducted numerous rounds of airstrikes in Yemen against Houthi militants, who continue to attack shipping ships in the Red Sea.

Oil traders will keep an eye on the preliminary US Gross Domestic Product Annualized (Q4), which is estimated to expand by 2.0%. The attention will shift to the US Core Personal Consumption Expenditures Price Index (Core PCE) on Friday. These events could significantly impact the USD-denominated WTI price. Oil traders will take cues from the data and find trading opportunities around WTI prices.