West Texas Intermediate (WTI) US crude Oil prices are edging lower in the Asian session on Tuesday after reaching a three-week high around the $78.75-$78.80 area. Currently trading just below $78.00, the commodity is down nearly 0.50% for the day as geopolitical tensions in the Middle East escalate.
Israeli forces near Gaza city and preparations for retaliatory attacks by Iran and its allies are fueling concerns of a broader conflict in the region. This could potentially disrupt global crude supplies, providing support to Oil prices. Additionally, expectations of a rate-cutting cycle by the Federal Reserve in September and a weaker US Dollar are also contributing to the positive sentiment in the market.
Despite a slight pullback on Tuesday due to technical selling, the overall fundamental backdrop remains supportive for WTI prices. The recent recovery from multi-month lows indicates a potential for further upside in the near term, with any dips likely to be viewed as buying opportunities.
Analysis and Breakdown:
The current situation in the Middle East has led to a rise in WTI Crude Oil prices, with geopolitical tensions driving market sentiment. The potential for supply disruptions and the dovish Fed outlook are supporting factors for Oil prices, while a weaker USD adds to the bullish bias. Investors should monitor the situation closely and consider potential buying opportunities as the market dynamics continue to evolve.