WTI trades around $71.40 after retracing its intraday gains

• WTI gained ground on the back of solid US economic data released on Friday.
• US has initiated the purchase of up to three million barrels of Crude oil for the SPR.
• The output growth in non-OPEC countries could exceed the supply in 2024.

West Texas Intermediate (WTI) trims its intraday profits, struggling to continue its winning streak for the third successive session. The WTI oil price trades lower around $71.40 per barrel during the European session on Monday.

Crude oil prices witnessed an upswing after last week's data release, revealing a certain level of resilience in the United States (US) economy. The robust employment data on Friday played a crucial role, depicting the labor market as one of the few positive aspects in the world's largest fuel consumer.

The recent decline in WTI oil prices has spurred demand from the US, which has initiated the purchase of up to three million barrels of Crude oil for the Strategic Petroleum Reserve (SPR), with delivery scheduled for March 2024. This move comes after the SPR reached a nearly 40-year low over the past year.

Despite the commitment of the Organization of the Petroleum Exporting Countries and allies (OPEC+) to reduce production by 2.2 million barrels per day (bpd) in the first quarter of 2024, investors remain skeptical that this will lead to a significant drop in supply. The anticipation of output growth in non-OPEC countries is causing concerns about excess supply in the coming year.

Additionally, concerns about deflation in China, the leading oil importer, along with a Consumer Price Index (CPI) and Producer Price Index (PPI) that didn't meet expectations, added to the downward pressure on Crude oil prices. Recent data revealed that China's oil imports dropped to a four-month low in November, reflecting high stockpiles and subdued fuel demand.

WTI oil traders adopt a cautious stance in anticipation of the Federal Reserve's (Fed) upcoming interest rate decision. The consensus expectation is that the Fed will keep interest rates stable at 5.5% in its forthcoming monetary policy statement on Wednesday. Additionally, the market also focuses on the API Weekly Crude Oil Stock data for the week ending on December 8, which will be closely observed on Tuesday for potential market impacts.