WTI drifts lower to $78.30 as investors await the US CPI data

• WTI prices trades in negative territory around $78.30 on Tuesday.
• OPEC's monthly report suggests that oil demand remains strong, revised up its 2023 forecast for global oil demand growth.
• Oil traders will closely monitor the US Consumer Price Index (CPI) for October.

Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around $78.30 so far on Tuesday. WTI prices snap a two-day winning streak as investors await the US inflation data due later on Tuesday.

Federal Reserve (Fed) Chair Jerome Powell reiterated last week that the Fed will hike rates again if deemed necessary to control inflation. The US Consumer Price Index (CPI) for October might offer some hints about the path of the Fed’s monetary policy. If the report shows stronger reading, this could raise the odds of additional tightening policy. It's worth noting that higher interest rates raise borrowing costs, which can slow the economy and diminish oil demand.

On the other hand, the optimistic oil market outlook might cap the WTI’s downside. The OPEC monthly report suggests that demand remains strong and OPEC revised up its 2023 forecast for global oil demand growth. Additionally, Russia and Saudi Arabia, leading oil exporters, confirmed that they will maintain the voluntary oil output cuts until the end of 2023 with concerns regarding economic growth and demand continuing to weigh on crude markets.

Oil traders will closely watch the US Consumer Price Index (CPI) for October. The US headline CPI is estimated to grow by 0.1% MoM in October and the core inflation measure is forecasted to remain at 0.3% MoM and 4.1% YoY. On Wednesday, the Chinese Retail Sales and Industrial Production will be released. These events could significantly impact the USD-denominated WTI price. Oil traders will take cues from the data and find trading opportunities around WTI prices.