- WTI price edges higher to $80.50 on Monday.
- The escalating Middle East geopolitical tensions and hope for a summertime uptick in fuel demand support the WTI price.
- The renewed US Dollar demand might cap the upside for black gold.
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $80.50 on Monday. The black gold edges modestly higher on the back of ongoing geopolitical tensions in the Middle East and the expectation of a summer uptick in oil demand.
Investors are concerned about a wider conflict in the Middle East that could endanger crude flows from the region, which boost the WTI price. The UN Secretary-General said on Sunday that a full-scale war between Israel and Hezbollah would be a catastrophe. Additionally, the Anadolu news agency reported that several Palestinian children and women were killed and injured overnight Saturday in Israeli air strikes that targeted two homes in Gaza City.
Furthermore, the hope for a summertime uptick in fuel demand for cooling and travel purposes could further support WTI prices. JPMorgan reported that global oil demand rose by 1.4 million bpd in June, supported by robust summer travel across Europe and Asia.
On the other hand, the stronger US Dollar (USD) after the US S&P PMI data for June and the hawkish stance of Federal Reserve (Fed) officials is likely to support the black gold. The Fed policymakers noted that the US central bank needs to see more progress on inflation before considering a rate cut. The higher-for-longer US rate narrative continues to weigh on WTI prices as it increases the cost of borrowing, which can dampen economic activity and oil demand.
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