In the early Asian session on Wednesday, the WTI price continues to trade in negative territory for the fifth consecutive day. The decline in WTI price comes as worries of a wider Middle East conflict fade, although rising bets on a Fed rate cut may limit its losses.
According to the Energy Information Administration (EIA), crude oil stockpiles in the United States fell by 4.65 million barrels to 426.03 million last week. This decrease in inventories may have an impact on the WTI price movement.
Despite the easing fears of a wider conflict in the Middle East, expectations of a Fed rate cut in September after the FOMC Minutes suggest that the WTI price may not see significant losses. Currently, WTI is trading around $71.70 on Thursday.
Iran’s decision not to attack Israel in response to recent events has contributed to the lower WTI prices. Additionally, progress in Middle Eastern ceasefire talks has added pressure on oil prices.
Looking ahead, oil traders will be keeping an eye on the preliminary US S&P Global Purchasing Managers Index (PMI) for August for further market direction. Fed Chair Jerome Powell’s speech at Jackson Hole on Friday may also provide insights into future interest rate plans.
Analysis
The decline in WTI price can be attributed to the diminishing fears of a wider conflict in the Middle East. However, the potential for a Fed rate cut in September and the decrease in US oil inventories may provide some support to the black gold. Oil traders should remain cautious and monitor key economic indicators and geopolitical developments to make informed decisions.