- WTI edges lower to $77.10 after reaching a three-month high last week.
- Concerns around global oil demand from the IEA could drag the oil price lower.
- The rising Middle East geopolitical conflicts might cap the downside of WTI.
Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around $77.10 on Wednesday. WTI prices edge lower as traders take profits from the crude oil uptick this month. However, the escalating geopolitical tensions in the Middle East might cap the downside of WTI prices.
Last week, the International Energy Agency (IEA) revised the 2024 oil demand growth prediction downward. The IEA expected global oil demand will grow by 1.22 million barrels per day (bpd) this year, less than OPEC's forecast of 2.25 million bpd. That being said, worries about global demand drag WTI prices lower.
On the other hand, the rising geopolitical conflict in the Middle East might lift the black gold and cap the downside. Israel carried out attacks in Lebanon and pledged to continue its attacks in Gaza, targeting the southern city of Rafah. On Monday, Houthi militants attacked another commercial ship in the Bab el-Mandeb strait, forcing the crew to abandon the vessel.
Oil traders will monitor the EIA Crude Oil Stocks Change and API Weekly Crude Oil Stock, due on Wednesday and Thursday, respectively. The highlight will be the FOMC Minutes on Wednesday, which might provide insight into the path to interest rate cuts and the current policy stance of the US Federal Reserve (Fed). These events could significantly impact the USD-denominated WTI price. Oil traders will take cues from the data and find trading opportunities around WTI prices.
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