WTI holds above $105.00 despite progressing demand worries
|- WTI is struggling to sustain above $106.00 amid the unavailability of any major event.
- Fed’s focus to absorb liquidity from the economy is backing lower demand forecasts.
- Rising oil production from the Middle East may ease supply concerns a bit.
West Texas Intermediate (WTI), futures on NYMEX, is trading lackluster in the early European session after a firmer rebound in the last two trading sessions. The oil prices are bent toward the bulls despite surging demand worries and the promise of higher oil production from the Middle East.
Investors have started worrying over the demand for oil in the US as the economy is highly focused on absorbing liquidity from the market. The resurging requirement to tame galloping inflation is focusing on tightening the quantitative measures dramatically. This will force the corporate to spend wisely on expansion plans due to the unavailability of the cheap dollar in circulation. Lesser expansion plans will dilute the demand for oil, which will keep the oil prices on tenterhooks.
Meanwhile, the prospects of rising oil production in the Middle East to mitigate the loss of oil supply due to heavy sanctions on Russia will stable the demand-supply mechanism. Now, the discussions of the European Union (EU) on the embargo of oil from Russia will remain in focus. After Germany’s backing for prohibiting Russian oil imports, an embargo on Russian oil looks a tad less difficult for the EU. It is worth noting that Germany was opposing the decision earlier due to its higher dependency on oil and energy from Russia.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.