WTI Crude Oil flat lines below $73.00 on easing supply concerns, bearish USD and US recession fears.
- A barrier is worries about declining demand and lowering geopolitical tensions.
- On Friday, WTI is expected stabilizing in a small range amidst conflicting fundamental signals.
- The USD is still being undermined by dovish Fed predictions, they may provide some assistance.
US West Texas Intermediate (WTI) crude oil prices fluctuate in a narrow range during the Asian session on Friday, unable to build on the day before’s rebound from a two-week bottom, which is located just below the mid-$71.00s. With worries about weakening demand, the commodity is now trading almost steady for the day in the $72.75 range and is expected to record significant weekly losses.
A negative revision of US companies’ job growth through March this year has reignited concerns about a possible recession in the world’s largest oil consumer. This turns out to be a major issue acting as a headwind for the black liquid and comes on top of ongoing concerns about an economic slowdown in China, the world’s largest oil importer. Aside from this, anticipations of a cease-fire in Gaza serve to limit the increase in crude oil prices.
In actuality, US authorities claimed that Israel and Hamas were close to reaching a deal. In turn, this allays fears of a bigger conflict in the Middle East and disruptions in supplies from the main oil-producing region. Nevertheless, official data that was made public on Wednesday revealed an excessive decline in US crude stockpiles. This could restrict the decline in crude oil prices, along with anticipations that the Federal Reserve’s decision to lower interest rates will spur economic growth.
Investors appear to be certain that the US central bank will announce a 25 basis point rate decrease at its September meeting and start its policy-easing cycle. Consequently, the US Dollar (USD) is unable to benefit from the moderate recovery from the YTD low that occurred overnight.
