WTI eyes more upside above $91.00 as global rate-hike cycle to pause soon

• The oil price sets for further recovery as investors see the global rate-tightening cycle concluding sooner.
• Deepening supply concerns due to supply cuts from Russia and Saudi Arabia have kept oil bulls in the driving seat.
• Investors await global PMI data for further guidance on the oil price.

West Texas Intermediate (WTI), futures on NYMEX, juggle in a narrow range inside Thursday’s trading range of $88.30-91.00. The oil price gathers strength to break above the crucial resistance of $91.00 as investors see an end to the global rate-tightening cycle due to upside risks of slowdown.

Fears of a global slowdown have heightened as global manufacturing and services PMIs have been underperforming. Global banks have downgraded Gross Domestic Product (GDP) projections for the second half of Western economies as firms are struggling to address their lofty interest obligations. Organization for Economic Development (OECD) cuts its global GDP growth rate to 2.7% for 2024 from the previous forecast of 2.9%.

While global central bankers are expected to conclude their historically aggressive rate-tightening spell, risks of a slowdown will remain intact as they have been reiterating on keeping them higher long enough’ till the achievement of price stability.

In addition to that, deepening supply concerns due to the ban on fuel exports from Russia and OPEC’s production cuts have outperformed the hawkish interest rate outlook from the Federal Reserve (Fed). The Fed supported an interest rate peak at 5.75%, which calls for expectations of one more interest rate increase in the remainder year.

Meanwhile, investors will shift focus on preliminary global Manufacturing PMIs, which will start releasing from next week. Bulls could lose grip over the oil price if factory activities continue to remain vulnerable due to a deteriorating demand outlook.