WTI recovers above $70.00 on Russia-Saudi joint statement on output cuts

• WTI prices rebound to $70.85 after hitting the the six-month lows.
• Saudi Arabia and Russia called on all OPEC+ members to join an agreement on production cuts for the stability of global oil markets.
• China’s Crude oil Imports declined 9% year on year in November.
• Oil traders await the US Nonfarm Payrolls report on Friday.

Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around $70.85 on Friday. WTI bounces off the six-month lows as Russia and Saudi Arabia asked the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) members to adhere to production output cuts.

On Thursday, Saudi Arabia and Russia, the world's two largest oil exporters, called on all OPEC+ members to join an agreement on production cuts for the stability of global oil markets. That being said, the positive development surrounding the OPEC+ output cut might lift the WTI prices.

On the other hand, several recent economic indicators have revealed that China's economic recovery is sluggish, which exerts some selling pressure on WTI prices. China’s Crude oil Imports declined 9% year on year in November due to high stockpile levels, negative economic data, and slower orders from independent refiners weakened demand.

Additionally, one of the key factors for the drop in WTI prices is the global economic slowdown and recessionary worries. According to the International Monetary Fund, it forecasts global growth of 3.0% in 2023 and 2.7% in 2024, both of which are lower than the 3.0% forecast in July.

Moving on, oil traders will closely watch the US Nonfarm Payrolls report on Friday. Also, the Unemployment Rate and Average Hourly Earnings for December will be released later in the day. 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.