WTI holds below the $79.00 mark, investors await Fed’s Powell speech
|- WTI prices recovers some lost ground but remains below the $80.00 barrier in the early Asian session on Friday.
- Investors worry about the oil demand and the US's higher interest rate.
- US officials are working on a plan to lift sanctions on Venezuela.
- Oil traders will focus on Friday’s speech from Jerome Powell.
Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around the $78.95 mark so far on Friday. WTI prices remain under pressure as investors worry about the oil demand and the possibility of higher interest rates in the US.
S&P Global PMI data on Wednesday showed that the business activity in the US, UK, Japan, and the Eurozone lost momentum as the figure came in below the expectation. This, in turn, weighs on the WTI prices as a global economic downturn could diminish oil demand.
Furthermore, Boston Federal Reserve (Fed) President Susan Collins said further rate rises are possible and that sending a strong signal regarding the timing of rate cuts is premature. It’s worth noting that higher interest rates raise borrowing costs, which can slow the economy and diminish oil demand.
Meanwhile, despite US sanctions, Iran stated that its crude oil output will hit 3.4 million barrels per day (bpd) by the end of September, as stated by its oil minister. Additionally, US officials are working on a plan to lift sanctions on Venezuela. It would allow Venezuela to export more crude if the South American nation advances towards free and fair presidential elections. This development boosts the WTI prices despite the strengthening of the US Dollar.
Moving on, oil traders will focus on Friday’s speech from Jerome Powell. The speech could provide insights into economic conditions and hints as to whether inflation is under control or whether additional interest rate hikes are required to combat inflation. The events could significantly impact the USD-denominated WTI price. Oil traders will take cues from the data and find trading opportunities around the WTI prices.
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