WTI advances towards $76.00 as investors look optimist for Caixin Manufacturing PMI

• Oil price looks exposed to recapture the $76.00 resistance ahead of Caixin Manufacturing PMI data.
• Caixin Manufacturing PMI is expected to jump to 50.2 from the former release of 49.2.
• BofA sees the terminal rate for the Fed above 6% amid resilience in the demand-drive inflation.

West Texas Intermediate (WTI), futures on NYMEX, have extended their recovery above the immediate resistance of $75.80 in the early Asian session. The oil price is exposed to the critical resistance of $76.00 as investors are optimistic about the release of the Caixin Manufacturing PMI data, which is scheduled for Wednesday.

Caixin Manufacturing PMI is expected to jump to 50.2 from the former release of 49.2. It is widely anticipated that the Chinese economy will outperform this year after three years of a strict lockdown to contain the spread of Covid-19. Chinese officials are dedicated to spurting overall growth through monetary and fiscal support as reopening measures require sufficient stimulus to infuse optimism in firms and households.

A report released by the People’s Bank of China (PBoC), this week, claimed a rebound in the Chinese economy in 2023 as epidemic prevention has relaxed and consumption has improved. The report also conveys that the vision of the PBoC is not limited to the expansion of domestic demand but is widened to longer-term economic growth and price stability.

Meanwhile, fears of more rates by the Federal Reserve (Fed) as its current monetary policy doesn’t look sufficient enough to bring down inflation, will keep the oil price on the tenterhooks. Analysts at Bank of America (BofA) expect Fed chair Jerome Powell to announce three more rate hikes this year considering the resilience in the demand-driven inflation. The BofA sees the terminal rate above 6% and recession appears more likely than a soft landing.

On Tuesday, the release of the oil inventories data by the United States American Petroleum Institute (API) will keep the oil price in action. Last week, the US agency reported a huge build-up of oil stockpiles by 9.89 million barrels.