West Texas Intermediate (WTI) oil prices are attempting to halt a four-day losing streak, currently trading around $77.40 per barrel during European trading hours on Wednesday. The decline in US crude inventories is providing some support for the price of the commodity.
On Tuesday, the American Petroleum Institute (API) reported a significant drop of 3.9 million barrels in weekly crude oil stock for the week ending July 19, surpassing market expectations of a 2.47 million-barrel decrease. This follows a previous decline of 4.44 million barrels. The US Energy Information Administration’s (EIA) crude oil stocks change report, scheduled for release on Wednesday, is expected to show a 0.7 million-barrel increase for the same period.
However, crude oil prices faced challenges during Asian trading hours, likely influenced by a wave of optimism surrounding potential ceasefire negotiations between Israel and Hamas. Israeli Prime Minister Benjamin Netanyahu has suggested the possibility of a ceasefire agreement, which could lead to the release of several hostages in Gaza.
Netanyahu is currently in Washington to address Congress. On Friday, he is scheduled to meet with Republican presidential nominee Donald Trump at Trump’s Mar-a-Lago resort, signaling an effort to strengthen ties between the two leaders, according to Reuters. US Vice President Kamala Harris will also meet with Netanyahu at the White House this week, although she will not preside over a joint session of Congress.
An aide to Harris told PTI, “We anticipate the Vice President will convey her view that it is time for the war to end in a way where Israel is secure, all hostages are released, the suffering of Palestinian civilians in Gaza ends, and the Palestinian people can enjoy their right to dignity, freedom, and self-determination. They will discuss efforts to reach an agreement on the ceasefire deal.”
The increasing likelihood of a Federal Reserve (Fed) rate cut in September is exerting pressure on the US Dollar. A weaker Greenback could make oil cheaper for buyers using other currencies, potentially boosting demand for the commodity. Additionally, lower interest rates could stimulate economic activity in the United States, the world’s largest oil consumer, which may help support oil prices.
Investors are closely monitoring the US Purchasing Managers Index (PMI) data, set to be released later in the North American session. Additionally, attention will be on the Gross Domestic Product (GDP) Annualized (Q2) figures, which will be released on Thursday. These reports are anticipated to provide fresh insights into the economic conditions in the United States.
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