WTI moves below $79.00 following hawkish remarks from Fed officials

West Texas Intermediate (WTI) Oil price extends losses to around $78.90 per barrel during the Asian session on Tuesday following the recent developments in the Middle East. However, the death of Iran’s President Ebrahim Raisi in a helicopter crash and emerging health concerns regarding Saudi Arabia’s King Salman bin Abdulaziz do not appear to be affecting the market.

Crude Oil prices struggled as investors weighed recent hawkish remarks from the Federal Reserve (Fed) despite last week's cooling US consumer inflation data. Federal Reserve Vice Chair Michael Barr said on Monday that the Fed is in a good position to hold the policy steady and watch the economy, as per a Reuters report.

In an interview with Bloomberg, Loretta Mester, President of the Federal Reserve Bank of Cleveland, stated that she no longer believes three rate cuts in 2024 are appropriate. Mester highlighted that inflation risks are skewed to the upside and emphasized that there is no harm in spending additional time gathering data on inflation, given the strength of the economy.

According to the CME FedWatch Tool, the likelihood of the Federal Reserve delivering a 25 basis-point rate cut in September has slightly increased to 49.6%, up from 48.6% a week ago.

In Canada, the expanded Trans Mountain pipeline (TMX) started commercial operations this month, overcoming years of regulatory delays and construction setbacks. This expansion will transport an additional 590,000 barrels per day (bpd) from Alberta to Canada's Pacific coast.

Investors are now turning their attention to the supply from the Organization of the Petroleum Exporting Countries and its affiliates (OPEC+). They are scheduled to meet on June 1 to set output policy, which will include decisions on whether to extend some members' voluntary cuts of 2.2 million barrels per day.