WTI remains on the back foot below $78.00 mark and two-week top touched on Wednesday

West Texas Intermediate (WTI) US crude Oil prices trade with a mild negative bias during the Asian session on Thursday, albeit lack bearish conviction and remain well within the striking distance of a nearly two-week high touched the previous day. 

Official data published by the Energy Information Administration (EIA) on Wednesday showed that US Crude inventories grew by 3.7 million barrels in the first week of June. Adding to this, the International Energy Agency (EIA), in its monthly report, trimmed the outlook for Oil demand growth in 2024 by 100,000 barrels per day to 960,000 bpd. Apart from this, some follow-through US Dollar (USD) buying, bolstered by the Federal Reserve's (Fed) hawkish surprise, further seems to undermine USD-denominated commodities, including Crude Oil prices.

The Fed kept interest rates unchanged at the end of a two-day policy meeting and now see the benchmark rate falling to 5.1% this year, suggesting just one rate cut in 2024 as compared to three estimated in March. The shift in projection provides a modest lift to the US Treasury bond yields and assists the USD to build on the overnight bounce from the weekly low touched in the aftermath of softer US consumer inflation figures. That said, persistent geopolitical tensions in the Middle East might continue to lend some support to Crude Oil prices and limit losses. 

Market participants now look to the US economic docket, featuring the release of the Producer Price Index (PPI) and the usual Weekly Initial Jobless Claims data later during the early North American session. This, along with the US bond yields and the broader risk sentiment, will influence the USD and provide some impetus to Oil prices. The aforementioned fundamental backdrop, meanwhile, warrants some caution before positioning for a firm near-term direction.