WTI gains traction above $81.10 amid the USD weakness, Hurricane Idali, eyes on US key data

• WTI prices gain momentum due to a decline in the US Dollar.
• The market lowered their expectation of the Federal Reserve (Fed) rate hikes in its September meeting.
• Hurricane Idali might impact petroleum distribution and fuel consumption.
• Oil traders will focus on EIA Crude Oil Stocks Change, US ADP private employment, US Q2 GDP growth data.

Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around the $81.18 mark so far on Wednesday. WTI prices gain momentum amid the weakening of the Greenback after the release of US economic data. However, investors will closely monitor the impact of Hurricane Idalia, which will probably hit Florida this week.

Following the downbeat US data on Tuesday, The market anticipated that the Federal Reserve (Fed) will push back rate hikes in its September meeting. That said, Fed Chairman Jerome Powell said at the Jackson Hole Symposium that the central bank opens the door for a potential additional rate hike depending on incoming data. This, in turn, may limit the downside for WTI prices.

During this time, a major Hurricane, Hurricane Idali was predicted to reach level 3 with winds of at least 111 mph (179 kph) before making landfall on Florida's Gulf Coast early Wednesday. Hurricane Idali might impact petroleum distribution and fuel consumption ahead of the Labour Day vacation next week.

In addition, concerns about China's economic woes could impact WTI demand, as China is the world's largest oil importer. The Chinese Caixin Manufacturing PMI for August will be closely monitored by market participants. The weaker-than-anticipated data may exert additional selling pressure on WTI.

About the data, the American Petroleum Institute (API) reported on Wednesday that US crude oil inventories in the week ending of August 25 dropped by about 11.486M barrels compared to the previous week’s -2.418M barrels.

Meanwhile, higher oil prices have been supported by tighter supply caused by Saudi Arabia's ongoing voluntary production curbs. Saudi Arabia is expected to extend a voluntary oil cut of 1 million barrels per day for the third month in a row into October.

Looking ahead, oil traders will focus on EIA Crude Oil Stocks Change for the week ending August 25. The US ADP private employment and estimate of Q2 Gross Domestic Product (GDP) data will be due on Wednesday, followed by the US inflation data on Thursday. Attention will turn to the highly-anticipated Nonfarm Payrolls 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 the WTI price.