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.
