West Texas Intermediate (WTI) Crude Oil prices are finding it difficult to gain any meaningful momentum on Tuesday, oscillating in a narrow range below the $68.00 per barrel mark during the Asian session. WTI has been consolidating its recent losses, touching a two-week low on Monday, as market sentiment remains uncertain amid mixed cues.
The recent easing of supply disruption concerns has acted as a major headwind for the black liquid. A ceasefire deal between Israel and the Lebanon-based Hezbollah militant group has reduced fears of further supply disruptions in the Middle East, a key region for global oil production. This development has helped keep WTI prices subdued. Additionally, the stronger US Dollar (USD) continues to weigh on demand for USD-denominated commodities like crude oil, further contributing to the downward pressure on prices.
Despite these bearish factors, geopolitical risks remain a tailwind for WTI. The ongoing Russia-Ukraine conflict has escalated tensions and added a risk premium to oil prices. Moreover, expectations that the Organization of Petroleum Exporting Countries and allies (OPEC+) will delay plans to increase production amid concerns over slowing demand growth have helped to limit the downside for crude oil. This uncertainty surrounding supply continues to provide some support for prices, preventing a sharper decline.
Market participants are also cautious ahead of key US data releases, including the highly anticipated Nonfarm Payrolls (NFP) report later this week. These macroeconomic reports are expected to influence the Federal Reserve’s future rate-cut path, which could, in turn, impact the demand for the US Dollar and provide a fresh catalyst for crude oil prices. Traders are waiting to see if these data points will create enough momentum to break the current deadlock in WTI.
As of now, the market remains range-bound, with traders reluctant to take aggressive positions. WTI oil’s next move will likely depend on the upcoming geopolitical developments, the outcome of the OPEC+ meeting on Thursday, and the latest US economic data, all of which could provide the clarity needed for a decisive direction in the near future.
