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West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $76.25 on Tuesday. WTI price extends its decline to the lowest level since June 10 amid the Federal Reserve’s (Fed) rate cut expectation in September and China’s weaker demand.
The Fed is anticipated to keep interest rates unchanged in the range of 5.25%-5.50% for the eighth time in a row at its July meeting on Wednesday. Traders will also take more cues from the Fed Press Conference for the interest rate cut path. Any dovish messages from the US central bank could be positive for risk-sensitive assets like WTI price.
Additionally, the weaker demand and sluggish economy in China weigh on WTI price as China is the top largest consumer of oil in the world. China’s total fuel oil imports fell by 11% in the first half of 2024, according to the data released earlier this month. “The economic problems in China are also sucking the juice out of the oil market,” said Bob Yawger, director of energy futures at Mizuho in New York.
The Golan Heights attack on Saturday raised worries about a war between Israel and Hezbollah. Israel accuses Hezbollah of carrying out the strike on a football pitch, which killed at least 12 people, including children, and it has promised to react. However, Hezbollah denies being involved in the attack. The market reaction to the recent Middle East conflict has been muted. However, escalating geopolitical tensions between Israel and Hezbollah might disrupt oil supplies and lift the WTI price. More By This Author:USD/JPY Remains On The Defensive Below 154.00, Fed/BoJ Rate Decision In The Spotlight GBP/JPY Remains On The Defensive Below 198.00 Amid Expectations For BoJ Rate Hike USD/CAD Trades With Mild Bearish Bias Near 1.3800, Eyes On US PCE Data
