WTI falls near $77.00 amid uncertainty ahead of China/US CPI and the Fed

• WTI corrects to $77.00 as investors remain cautious ahead of eventful Wednesday.
• China’s PPI is expected to continue its deflationary streak.
• The Fed is widely anticipated to keep interest rates steady in the 5.25%-5.50% range.

He West Texas Intermediate (WTI), futures on NYMEX, falls near $77.00 in the American session on Tuesday. Oil price attractiveness has remained significantly strong in recent trading sessions as investors were optimistic about demand due to the summer holiday season in the northern hemisphere.

Black gold rebounded sharply after falling to a four-month low near $72.50. That sell-off was fueled by the OPEC+ meeting in which members communicated about easing production cuts to some extent.

However, uncertainty among investors ahead of the release of May Consumer Price Index (CPI) data in the world’s largest and second-largest nations has kept a lid on the oil price. Investors will focus on China’s annual CPI data, which is estimated to have grown steadily by 0.3%.

Market participants will also pay close attention to the annual Producer Price Index (PPI) numbers, which indicate changes in the prices set by business owners at their facilities. The PPI data is expected to have deflated at a slower pace of 1.8% from the previous reading of 2.5%. It should be noted that China is the world’s second largest oil importer, and strong demand from the region improves the outlook for global oil demand.

Meanwhile, US inflation data will also be on the radar as investors want to know if price pressures are progressively easing towards the desired 2% rate. Signs that inflation remains persistent would reduce market speculation about Federal Reserve (Fed) rate cuts. Investors currently expect the Fed to cut interest rates just once this year.

The main event for the market will be the Fed’s interest rate decision on Wednesday. The Fed is expected to maintain the status quo with a hawkish interest rate outlook.