West Texas Intermediate (WTI) crude oil traded at approximately $75.70 per barrel at the time of writing, rebounding from a recent low of $74.24 on Tuesday. This increase is attributed to heightened geopolitical tensions in the Middle East, which are seen as a potential threat to oil supply.
On Tuesday, the Israeli government reported that it had carried out an airstrike in Beirut, claiming to have killed Hezbollah’s top commander. This action was in retaliation for a rocket attack on Israel over the weekend. Despite efforts by US and UN officials to calm tensions and prevent a broader conflict in the region, the situation remains tense, as reported by Reuters.
The Federal Reserve (Fed) is expected to maintain its current interest rates in its upcoming meeting on Wednesday, though there is growing speculation about a possible rate cut in September. Such a move could stimulate economic activity in the United States, the world’s largest consumer of crude oil, thereby supporting demand for the commodity.
However, oil prices are facing pressure from a sluggish economic outlook in China, the world’s largest importer of crude oil. According to a recent official factory survey released on Wednesday, China’s manufacturing activity contracted for the third consecutive month in July.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, led by Russia, are scheduled to convene an online Joint Ministerial Monitoring Committee (JMMC) meeting on Thursday. Sources cited by Reuters suggest that the group is unlikely to alter its current production cut agreement, with plans to gradually ease these cuts starting in October.
Later today, the US Energy Information Administration (EIA) will release its report on Crude Oil Stocks Change for the week ending July 26. Market expectations are for a decrease of 1.60 million barrels, following a decline of 3.741 million barrels in the previous week.
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