WTI stands tall near multi-month peak, just above $85.00/barrel mark

West Texas Intermediate (WTI) US crude Oil prices entered a bullish consolidation phase during the Asian session on Thursday and oscillated in a narrow trading band near the highest level since October 2023 touched the previous day. The commodity is currently placed just above the $85.00 mark, nearly unchanged for the day, and is influenced by a combination of diverging forces.

The official report published by the Energy Information Administration (EIA) on Wednesday showed an unexpected build in the US crude stockpiles, which, in turn, is seen as a key factor acting as a headwind for the black liquid. The downside for crude Oil prices, however, remains cushioned in the wake of concerns about supply disruptions in the Middle East, tight global supply, and signs of improving demand.

Against the backdrop of Ukrainian attacks on Russian refineries, which have cut fuel supply, the risk that the Israel-Hamas war may spread to include Iran and disrupt supplies in the key Middle East region acts as a tailwind for crude Oil prices. Adding to this, a meeting of top OPEC+ ministers on Wednesday kept oil supply policy unchanged and pressed some countries to increase compliance with output cuts.

Meanwhile, Federal Reserve Chairman Jerome Powell sounded cautious about future interest rate cuts due to a still-resilient US economy. Adding to this, the upbeat Chinese manufacturing data released earlier this week fueled optimism about rising Oil demand from the world's largest crude importer. This could further lend support to crude Oil prices and contribute to limiting any meaningful corrective slide.