WTI posts fresh six-week high near $81.00 on geopolitical uncertainty and firm Fed rate-cut bets

WTI price trades close to a six-week high on multiple tailwinds.
Firm Fed rate-cut prospects improve the Oil demand outlook.
Geopolitical tensions in the Middle East and Europe have raised supply concerns.

Sagar Dua FXStreet

West Texas Intermediate (WTI), futures on NYMEX, hold gains near fresh six-week high near $80.70 in Wednesday’s Asian session. The Oil price strengthens due to an improvement in expectations that the Federal Reserve (Fed) will start reducing interest rates from the September meeting and deepening tensions in the Middle East and Europe.

The CME FedWatch tool shows that traders see a 67% chance of the Fed reducing key rates in September. Traders are also pricing in two rate cuts, this one against one signaled by policymakers in their latest interest rate projections.

Increased confidence in investors for Fed rate cuts in September is the outcome of the soft United States (US) Consumer Price Index (CPI) report for May, which indicated that the progress in the disinflation process has resumed. Also, lower-than-expected growth in the US Retail Sales for May has boosted early rate-cut expectations. The Retail Sales data excluding automobiles- a measure of consumer spending- contracted for the second straight month by 0.1%.

The high possibility of early rate cuts by the Fed is a favorable situation for the Oil price, as it improves sentiment for the global economic outlook.

On the geopolitical front, Ukraine’s drone attack on an oil terminal in Russia's southern port of Azov and the announcement of an all-out war by Israeli Foreign Minister Israel Katz against Lebanon's Hezbollah have triggered supply concerns.

Going forward, the next trigger for the Oil price will be Energy Information Administration (EIA) Crude Oil Stocks Change data for the week ending June 14, which will be published on Thursday due to a holiday in US markets on account of Juneteenth.

WTI US OIL

Overview
Today last price	80.68
Today Daily Change	-0.03
Today Daily Change %	-0.04
Today daily open	80.71

Trends
Daily SMA20	77.28
Daily SMA50	79.5
Daily SMA100	79.32
Daily SMA200	79.12

Levels
Previous Daily High	80.78
Previous Daily Low	79.1
Previous Weekly High	78.98
Previous Weekly Low	75.03
Previous Monthly High	81.25
Previous Monthly Low	76.04
Daily Fibonacci 38.2%	80.14
Daily Fibonacci 61.8%	79.74
Daily Pivot Point S1	79.62
Daily Pivot Point S2	78.52
Daily Pivot Point S3	77.94
Daily Pivot Point R1	81.29
Daily Pivot Point R2	81.87
Daily Pivot Point R3	82.97

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.

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