WTI slides towards $96.00 on chatters surrounding OPEC, recession

• WTI renews intraday low amid sour sentiment, anxiety ahead of Wednesday’s OPEC+ meeting.
• OPEC defends Russia’s membership to the cartel amid criticism over Moscow’s invasion of Ukraine.
• Recession woes join hawkish Fedspeak, mixed US data to roil the mood.
• Risk catalysts, US ISM Manufacturing PMI may entertain traders ahead of OPEC+, US NFP.

WTI crude oil prices refresh their daily low at around $96.50 during Monday’s Asian session. In doing so, the black gold justifies the market’s risk-aversion, as well as cautious sentiment ahead of this week’s meeting of the Organization of the Petroleum Exporting Countries (OPEC)and allies including Russia, a group known as OPEC+.

That said, OPEC’s defense of Russia’s membership in the OPEC+ group appeared to have recently favored the oil bears. During the weekend, OPEC Secretary General Haitham al-Ghais said Russia's membership in OPEC+ is vital for the success of the agreement.

Elsewhere, downbeat prints of China’s official NBS Manufacturing PMIs for July, to 49.0 versus 50.4 expected and 50.2 prior, join the fresh Sino-American tussles over Taiwan to roil the sentiment and exert downside pressure on oil prices. US House Speaker Nancy Pelosi begins her Asia visit but the schedule doesn’t mention her Taiwan visit The reason could be attributed to Beijing’s warnings. “Six people familiar with the Chinese warnings said they were significantly stronger than the threats that Beijing has made in the past when it was unhappy with US actions or policy on Taiwan,” said the Financial Times (FT).

Additionally, comments from Minneapolis Fed President Niel Kashkari and the Fed’s preferred inflation gauge appeared to have probed the greenback bears and challenged the oil’s rebound of late. “The fed is still a long way away from backing off rate hikes,” said Fed’s Kashkari to the New York Times (NYT). The policymaker added, “Hiking rates by half a point at coming Fed meetings seems reasonable to me.” Furthermore, the US Core Personal Consumption Expenditures (PCE) Price Index, the Fed's preferred gauge of inflation, rose to 4.8% YoY for June versus 4.7% prior.

On the same line, the “technical recession” in the US, as the Annualized readings of the US Q2 Gross Domestic Product (GDP) dropped for the second straight quarter, appeared to have also weighed on the energy benchmark.

While portraying the mood, the S&P 500 Futures print mild losses but the US Treasury yields consolidate a recent fall around 2.66%, up two basis points (bps).

Moving on, Wednesday’s OPEC+ verdict will be important for the WTI crude oil traders ahead of Friday’s US employment report for July. “Two of eight OPEC+ sources in a Reuters survey said a modest increase for September will be discussed at the Aug. 3 meeting, while the rest said output would likely be held steady,” said Reuters.

Technical analysis

WTI sellers approach a two-week-old ascending triangle formation’s support, near $95.25 by the press time. However, July 25 swing low around $92.40 will be a confirmation point for the “double top” bearish pattern.

Alternatively, recovery remains elusive until the quote crosses the aforementioned triangle’s upper line, also the “double top”, near $100.80-$101.00.