WTI remains supported around $70.00 as supply cuts tease global outlook

• Oil prices are holding an auction near $70.00 as Saudi has announced fresh supply cuts. 
• The announcement of production cuts is making efforts to trim the impact of weak global macro cues.
• Investors would get more clarity about the Fed’s interest rate guidance from the release of the FOMC minutes.

West Texas Intermediate (WTI), futures on NYMEX, are holding their auction near the round-level support of $70.00 in the early London session. The oil price has turned sideways as fresh supply cuts announcements by Saudi Arabia are giving a tough fight to deepening fears about a bleak global outlook.

Saudi Arabia's Ministry for Energy announced it would be extending its production cut for crude for an extra month, as reported by Newswires. Usually, the decision to production cuts follows the need of bringing stability in the oil price.

The announcement of production cuts is making efforts to trim the impact of weak global macro cues. On Monday, the United States Institute of Supply Management (ISM) reported that the spell of contraction in Manufacturing PMI has extended to eight months. Investors should be aware that a figure below 50.0 is considered a contraction.

The economic data landed at 46.0, significantly lower than the expectations of 47.2 and the former release of 46.9. Contrary to the US PMI data, New Orders Index jumped to 45.6, higher than the consensus of 44.0 and the prior release of 42.6. This indicates that oil demand is extremely weak and more interest rates by the Federal Reserve (Fed) would put more pressure on black gold.

Investors would get more clarity about the Fed’s interest rate guidance from the release of the Federal Open Market Committee (FOMC) minutes, which will release on Wednesday.

The US Dollar Index (DXY) has rebounded to nearly 103.10 ahead of the US Employment data, which will release on Thursday. Automatic Data Processing (ADP) is expected to show a decline in the Employment Change to 180K for June vs. the former release of 278K.