WTI aims to smash $85.00 despite a drop in global PMIs, OPEC+ decision eyed

• Oil prices are marching higher to hit the immediate hurdle of $85.00.
• Globally, weak manufacturing PMI performance has failed to stop the oil bulls.
• OPEC+ production cuts announcement will weaken the black gold further.

West Texas Intermediate (WTI), futures on NYMEX, are gathering momentum before marching towards the critical hurdle of $85.00. The black gold is inching higher from the past week after hitting a low at around $76.00. On a broader note, this could be a pullback move as the oil prices have remained in a vulnerable situation.

Despite a weaker performance on the manufacturing PMIs front by various nations, the oil prices have attracted bids from market participants. Starring from the world’s largest oil importer, China, which is enjoying a full week holiday reported a decline in the Caixin Manufacturing PMI data for August month. The economic data has landed at 48.1, lower than the expectations and the prior release of 49.5.

Adding to that, the performance of the world’s largest economy for August month was also vulnerable. The US ISM Manufacturing PMI data declined to 50.9 vs. the expectations of 52.2 and the prior release of 52.8. Also, the forward guidance is not lucrative. The US ISM New Orders Index data is declined sharply to 47.1 against the projections of 49.6 and the former figure of 51.3. Weaker PMI’s performance indicates a decline in the oil demand.

Well, what is hurting the oil bears is the expectation of a bigger production cut by the OPEC+ group to bring price stability in the oil market. The OPEC+ meeting seems crucial as it is the first face-to-face meeting after the pandemic and is expected to remain more elaborated and stretched. No doubt, the announcement of production cuts by the oil cartel will benefit Russia more, which is selling its discounted oil to nations like India and China.