Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around $82.00 on Tuesday. WTI prices edge higher amid the weaker US Dollar (USD) and the renewed geopolitical tensions in the Middle East and Eastern Europe, which fuel fears of supply disruption.
The escalating geopolitical tension in the Middle East, combined with a rise in attacks on energy facilities in Russia and Ukraine, raised fears over global oil supplies and lift WTI prices. Disruptions to oil refineries in Russia were caused by Ukraine’s recent attacks on Russian oil infrastructure, with at least seven refineries attacked this month alone. This increases the demand for available crude oil shipments. Analysts estimated that these disruptions affected around 12% of Russia’s total oil processing capacity.
Apart from this, the anticipation of interest rate cuts by the US Federal Reserve (Fed) this year has lifted the black gold. Lower interest rates typically stimulate the economy, which leads to more demand for WTI prices. Market players will take more cues from the US Personal Consumption Expenditures Price Index (PCE) data for February on Friday for confirmation on the timing of rate cuts. However, if the report shows stronger-than-expected readings, this could delay the expectation of rate cuts from the Fed this year and cap the upside of the WTI prices.
Moving on, oil traders will keep an eye on the US Consumer Confidence by the Conference Board, Durable Goods Orders, and the FHFA’s House Price Index, due on Tuesday. Later this week, the US Gross Domestic Product Annualized (Q4) will be released on Thursday. The US February PCE data will be published on Friday. These events could significantly impact the USD-denominated WTI price. Oil traders will take cues from the data and find trading opportunities around WTI prices.More By This Author:NZD/USD Trades Sideways Above 0.6000 On Softer US Dollar, US PCE Data Eyed EUR/USD Price Analysis: The initial support level is seen at the 1.0800 markAUD/JPY Faces Some Selling Pressure Near 99.00 Following Japanese CPI Data
