WTI Crude Oil Prices Recover to $82 Amid Positive Lease Developments

11 July 2024

    West Texas Intermediate (WTI) crude oil prices are building on the overnight recovery from the $80.00 level, or a two-week low, and gaining follow-through positive traction during Asian trading on Thursday. The uptick is supported by a combination of factors and lifts the commodity to a multi-day peak, around $82.00 in the last hour.

    OPEC’s Steady Forecast and EIA Report

    The Organisation of the Petroleum Exporting Countries (OPEC) maintained its forecast for relatively strong growth in global oil demand this year and next. Adding to this, the US Energy Information Administration (EIA) reported that crude inventories fell by 3.4 million barrels to 445.1 million barrels in the week ended July 5, far exceeding analysts’ expectations. This is seen underpinning crude oil prices amid a modest US Dollar weakness.

    Federal Reserve’s Influence

    Federal Reserve Chair Jerome Powell said, during the Congressional testimony, that the US remained on a path to stable prices and continued low unemployment. The comments reaffirmed market expectations that the Fed will lower borrowing costs in September and cut interest rates again in December. The outlook keeps the USD bulls on the defensive and seems to benefit the USD-denominated commodities, including crude oil.

    Supply Disruptions and Global Factors

    Furthermore, concerns about supply disruptions stemming from the ongoing conflicts in the Middle East turn out to be another factor lending some support to the black liquid. Meanwhile, weak inflation data from China – the world’s top oil importer – might cap the upside for crude prices. Traders might also prefer to wait for the release of the US consumer inflation figures before positioning for the next leg of a directional move.

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    What factors are driving the rise in WTI crude oil prices to a multi-day peak of $82?

    The rise in WTI crude oil prices to $82 is driven by a combination of supply constraints, geopolitical tensions, and increased demand as economies recover from the pandemic. OPEC+ production cuts and disruptions in key oil-producing regions also contribute to the upward pressure on prices.

    Can the factors supporting the uptick in WTI crude oil prices sustain its rise above $82?

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