• WTI edges lower to $79.85 after retracing from $80.65 amid the fear of China's growth rate, potential US interest rate hikes.
• A tighter supply caused by Saudi Arabia and Russia's ongoing voluntary production curbs might support WTI price.
• Oil traders await the Chinese Manufacturing PMI, US Nonfarm Payrolls.

Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around the $79.85 mark so far on Tuesday. WTI prices posts a modest gain after retreating from $80.68 as investors remained concerned about China's growth rate and further US interest rate hikes that could curtail oil demand.

The Fed's hawkish stance on potential rate hikes fuels concern in WTI prices. The Federal Reserve (Fed) Chairman Jerome Powell remarked on Friday that the central bank is prepared to raise interest rates further if necessary and that the next rate hike will be determined by data. Powell also said that the robust economic growth and tight labor market conditions could pave the way for the continuation of a tightening cycle. In turn, this may limit the upside potential for WTI prices, as higher interest rates could raise borrowing costs, slow the economy, and diminish oil demand.

Furthermore, the concern about the economic slowdown in China could weigh on WTI demand as China is the major oil importer in the world. Market players will keep an eye on the release of Chinese Caixin Manufacturing PMI for August. The weaker-than-expected data could exert some selling pressure on WTI further.

In the meantime, tighter supply due to Saudi Arabia and Russia's ongoing voluntary production cuts may support higher oil prices. Saudi Arabia has reportedly stated that it will maintain production at approximately 9 million barrels per day through September, a decrease of approximately 1 million barrels from August levels.

Looking ahead, oil traders will closely watch the Chinese Caixin Manufacturing PMI for August due on Friday. The figure is expected to rise from 49.2 to 49.3. The critical event will be the Nonfarm Payrolls (NFP) data on Friday. The events could significantly impact the USD-denominated WTI price. Oil traders will take cues from the data and find trading opportunities around the WTI prices