• WTI cut a three-day winning streak, falling to a low near $80.64 and then settling at $81.50.
• USD’s strength and weak Chinese data contribute to the price’s downward movements.
• Saudi’s supply cut expectations may limit the downside’s potential.

On Tuesday, the West Texas Intermediate (WTI) barrel dropped below $81.00, weakened by a strong USD and soft Chinese manufacturing data released during the Asian hours. However, the price cleared a great deal of the daily losses and recovered towards $81.50.

Chinese economic data disappointed. The Caixin Manufacturing PMI dropped below 50, intro contraction territory at 49.2, lower than the consensus of 50.3 and the previous 50.5. Its worth noticing that China is the biggest Oil importer in the world, so a weak economy means lower energy demand, making the price decrease.

That being said, the Chinese government taking up economic stimulus to bolster up local economic activity may limit the price’s downside potential. In addition, Oil traders are keeping an eye on potential Saudi production cuts, which could further benefit the WTI price dynamics.

For the rest of the week, attention is set on the labour market of the US, which will impact the USD price dynamics. Chair Powell clearly stated that future decisions will depend on incoming data, so ADP job employment change, Jobless Claims, and Nonfarm Payrolls will be closely monitored this week.