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Market Analysis

WTI Approaches $76.00 Amid Rising Middle East Tensions and Oil Supply Concerns
Amos Simanungkalit · 3.4K Views

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West Texas Intermediate (WTI) crude oil prices are trading around $75.70 per barrel at the time of writing. WTI has rebounded from an eight-week low of $74.24 recorded on Tuesday, largely due to rising geopolitical tensions in the Middle East that threaten oil supply.

The Israeli government has reported the killing of Hezbollah's top commander in an airstrike on Beirut, a response to Saturday's cross-border rocket attack on Israel. This escalation comes despite ongoing diplomatic efforts by US and UN officials to prevent a broader conflict that could destabilize the region further, as reported by Reuters.

The Federal Reserve (Fed) is expected to keep interest rates unchanged in its upcoming meeting on Wednesday. However, speculation is growing about a potential rate cut in September, which could stimulate economic activity in the US, the world's largest crude oil consumer, thereby boosting demand for the commodity.

Conversely, a weak economic outlook in China, the world's largest crude importer, is curbing oil price gains. China's manufacturing sector contracted for the third consecutive month in July, according to an official factory survey released on Wednesday.

On Thursday, the Organization of the Petroleum Exporting Countries and allies led by Russia (OPEC+) will conduct an online Joint Ministerial Monitoring Committee (JMMC) meeting. Reuters reports that the group is expected to maintain its current production cut agreement but will begin to unwind some of these cuts starting in October.

Later in the North American session, the US Energy Information Administration (EIA) will release its Crude Oil Stocks Change report. The market anticipates a decline of 1.60 million barrels for the week ending July 26, following a previous drop of 3.741 million barrels.

 

 

 

Paraphrasing text from "FX Street" all rights reserved by the original author.

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