WTI Steadies Above $68.50 Amid Large Surprise Crude Draw -

WTI Steadies Above $68.50 Amid Large Surprise Crude Draw

Nov 27, 2024Jeremy ParkinsonFinance0

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WTI price remains steady near $68.65 in Thursday’s early Asian session.

Israel agreed to a ceasefire agreement with Lebanon’s Hezbollah militants, effective Wednesday.

US crude stocks fell by 1.844 million barrels last week, according to the EIA.

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $68.65 on Wednesday. The WTI price holds steady as a large surprise crude draw offsets a ceasefire deal between Israel and Hezbollah. The oil market might be somewhat quiet due to the Thanksgiving Day holiday.

The latest US economic data indicated that the progress on lowering inflation appears to have stalled in recent months, which could diminish the expectation for the Federal Reserve (Fed) to cut interest rates in 2025. The markets are now pricing in nearly 66.5% chance that the Fed will cut rates by a quarter point in December, up from 55.7% before the PCE data, according to the CME FedWatch Tool.

However, they anticipate the Fed will leave rates unchanged at its meetings in January and March. It’s worth noting that slower-than-expected rate reductions would keep borrowing costs high, which could slow economic activity and lower oil demand.

Israel approved a ceasefire agreement with Lebanon’s Hezbollah militants that would end nearly 14 months of fighting linked to the war in the Gaza Strip, effective Wednesday. The easing geopolitical risks could drag the WTI price lower. “The real question will be for how long it (the ceasefire) will truly be honored,” said Dennis Kissler, senior vice president of trading at BOK Financial.

However, a decline in US crude inventories last week might boost the black gold price. The US Energy Information Administration’s (EIA) weekly report showed Crude oil stockpiles in the United States for the week ending November 22 fell by 1.844 million barrels, compared to a rise of 545,000 barrels in the previous week. The market consensus estimated that stocks would decrease by 1.3 million barrels. Meanwhile, gasoline stocks added 3.3 million barrels in the week to November 22. This compared with an inventory build of 2.1 million barrels for the previous week.More By This Author:GBP/USD Strengthens Above 1.2550 Ahead Of US PCE Inflation Data WTI Recovers Above $68.50 On A Large Surprise Crude Draw USD/CAD Posts Modest Gains Near 1.4000 As Traders Brace For FOMC Minutes