- WTI rises to $78 as uncertainty deepens over a truce between Israel and Palestine.
- The outlook for oil demand remains weak as the Fed maintains a hawkish stance.
- Uncertainty deepens over oil demand as the US EIA reported higher oil inventories for the week ending February 23.
West Texas Intermediate (WTI), futures on NYMEX, is up 0.28% in Thursday’s European session after a strong recovery from $77.60 ahead of key United States Personal Consumption Expenditure Price Index (PCE) for January, which will be published at 13:30 GMT.
The monthly inflation data is forecast to rise 0.4% in January, at a higher pace than the 0.2% increase in December. January Core PCE is also projected to grow at an annual pace of 2.8% versus. 2.9% in December. Federal policymakers track the underlying inflation for policy decision-making as base effects don’t distort it.
Meanwhile, investors are worried about the near-term demand for oil due to the risks of interest rates remaining restrictive for extended periods. Fed policymakers see no rush to rate cuts as they need to observe more data to confirm that inflation will return to the desired rate of 2%. The oil demand typically reduces in a high interest-rate environment.
Downside risks to oil demand escalated after the US Energy Information Administration (EIA) reported on Wednesday that crude oil stockpiles rose by 4.199M against expectations of 2.743M in the week ending February 23.
Meanwhile, the downside in the oil price remains well-supported as uncertainty deepens over a ceasefire between Israel and Palestine-backed Hamas. On Wednesday, Hamas said that it fired a volley of rockets toward northern Israel, which has downplayed expectations of a ceasefire. However, US President Joe Biden is confident there will be a truce by March 4.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds steady near 1.0800 ahead of key events
EUR/USD stays in a consolidation phase at around 1.0800 early Tuesday after closing in positive territory on Monday. Market participants await ZEW sentiment data from Germany and the EU, producer inflation data from the US and Fed Chairman Powell's speech.
GBP/USD trades at around 1.2550 after UK jobs data
GBP/USD struggles to build on Monday's gains and hovers around 1.2550 in the European session on Tuesday. The data from the UK showed that the Unemployment Rate edged higher to 4.3% in the three months to March as forecast, failing to trigger a reaction.
Gold price gains ground ahead of US PPI data, Fed’s Powell speech
Gold price rebounds despite the consolidation of the US Dollar on Tuesday. The upside of yellow metal might be limited as traders might wait on the sidelines ahead of key US inflation data this week.
Top meme coins post gains following increased social activity amid GameStop pump
Meme coins in the crypto market saw impressive gains on Monday following a recent surge in GameStop stock. The increased attention surrounding these tokens signifies a potential resumption of the meme coin frenzy of March.
Entering a crucial run of data for financial markets
We are entering a crucial period for financial markets and forecasters as Americans' near-term inflation expectations rise again. Upcoming reports on the CPI and PPI for April, along with new data on retail sales and industrial production, will provide valuable insights.