WTI corrects below $77.00 as buyers grow nervous ahead of the Caixin Manufacturing PMI

After encountering stiffer resistance above $77.50 in the late New York session, West Texas Intermediate (WTI) futures on the New York Mercantile Exchange have sharply reversed. As investors wait for the Caixin Manufacturing PMI data to be released, the oil price has fallen to $76.60 and is expected to remain on edge.

There is no disputing that international organizations and investment banking firms are optimistic about a strong economic rebound in China following the administration's dismantling of pandemic controls following a three-year lockdown. The People's Bank of China (PBoC) has pledged a complete recovery in domestic demand through expansionary monetary policy, so China's post-pandemic period is anticipated to be robust.

Investors are anxiously awaiting February's figures after being taken aback by January's disappointingly low Caixin Manufacturing PMI data. A prolonged period of negativity would be detrimental to the market's oil prices. In general, investors continue to be risk cautious as they anticipate a bleak future due to aggressive Western central banks. And the current low Manufacturing PMI for China will make investors' risk aversion even worse.

The majority predicts that IHS Markit will issue the Caixin Manufacturing PMI at 50.2, up from the previous release of 49.2.

In addition to the Caixin Manufacturing PMI, the United States Energy Information Administration's (EIA) oil inventory data for the week concluding February 24 will be closely monitored.

Despite being smaller than the previous release of nearly 10 million barrels, US American Petroleum on Tuesday reported a massive stockpile of oil stockpiles of 6.20 million barrels. For the past three months, oil inventories have been steadily growing, pointing to a sharp drop in global consumption.