West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $83.60 on Tuesday. The rise of the WTI price is bolstered by renewed fears of Middle East geopolitical risks and expectations of rising summer fuel demand.
Oil traders have added long positions amid worries that tensions between Israel and the Iran-backed Hezbollah militia in Lebanon could spread and reduce global oil supplies. This, in turn, might lift the black gold in the near term. Additionally, the Atlantic weather season remains a concern, with Hurricane Beryl barreling through the Caribbean as a Category 4 storm, said Phil Flynn, senior market analyst at the Price Futures Group.
Apart from this, strong summer driving demand is likely to boost WTI prices for the time being. Last week, the Energy Information Administration (EIA) showed that both output and demand for main petroleum products reached a four-month high in April.
On the other hand, the higher-for-longer rates in the United States might weigh on the WTI price as it can slow economic growth and reduce oil demand. San Francisco Fed President Mary Daly said on Friday that monetary policy is working, but it’s too early to tell when it will be appropriate to cut the interest rate. Daly further stated, “If inflation stays sticky or comes down slowly, rates would need to be higher for longer.” More By This Author:BTC/USD Forex Signal: Bearish Pennant Points To More DownsideWTI Consolidates Gains Near $82.00 Amid Hope For Strong Summer Driving Demand USD/CAD Remains On The Defensive Near 1.3650 Ahead Of Canadian CPI Data
