WTI drops toward $81.00 as US Dollar remains stable
- WTI price loses ground as US Dollar holds ground due to improved yields.
- Crude Oil may limit its downside as traders expect the Fed to reduce rates in September.
- Fed Governor Christopher Waller stated that the US central bank is ‘getting closer’ to a rate cut.
West Texas Intermediate (WTI) Oil price edges lower due to improved US Dollar (USD). WTI price trades around $81.20 per barrel during the European hours on Thursday. However, WTI price gained ground during Thursday’s Asian session, driven by a bigger-than-expected decline in crude stocks in the United States, the world's largest oil consumer.
The US Energy Information Administration (EIA) released the US Crude Oil Stocks Change on Wednesday, reporting a decrease of 4.87 million barrels for the week ending July 12. This decline exceeds the expected drop of 0.80 million barrels and the previous decrease of 3.443 million barrels.
Additionally, growing expectations of the Federal Reserve (Fed) reducing interest rates in September may improve the economic conditions in the United States. The lower borrowing cost would help in increasing economic activities, hence, boosting Oil demand.
On Wednesday, Fed Governor Christopher Waller said that the US central bank is ‘getting closer’ to an interest rate cut. Meanwhile, Richmond Fed President Thomas Barkin stated that easing in inflation had begun to broaden and he would like to see it continue,” per Reuters.
The price of crude Oil could face challenges due to a slowing Chinese economy in the second quarter, which reduces demand in the world's largest Oil-importing country. China's growth drivers remain uneven, and trade tensions are escalating, with the US and EU imposing new tariffs on Chinese electric vehicles (EVs).
