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.
Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
