WASHINGTON: West Texas Intermediate (WTI) price trades around $70.50 per barrel during the Asian session on Wednesday. The WTI price encountered challenges in the previous session as market expectations for the Federal Reserve’s (Fed) rate cuts diminished. This shift in expectations is attributed to signs of sluggish growth in the United States (US) economy towards the close of 2024.
Despite potential disruptions in the supply of crude oil following the naval clash in the Red Sea, prices face downward pressure. The recent thwarting of a Houthi militant attack on a Maersk container ship by US helicopters averted a potential escalation. However, the threat level rises with reports of an Iranian warship entering the Red Sea.
Concerns about the deceleration of global economic growth and heightened oil supply in the first half of 2024, especially from producers outside the Organization of the Petroleum Exporting Countries and its allies (OPEC+), contribute to the downward pressure on crude oil prices.
OPEC+ is expected to hold a meeting of its Joint Ministerial Monitoring Committee (JMMC) in early February to evaluate adherence to production agreements. In the previous meeting, OPEC+ agreed to voluntary output cuts totalling around 2.2 million barrels per day (bpd) for the current quarter.
Wednesday’s scrutiny includes the upcoming release of the US EIA Crude Oil Stocks Change and API Weekly Crude Oil Stock data for the week ending on December 29. Analysts surveyed by Reuters anticipate a decline in crude stockpiles for the last week, while distillate and gasoline stocks are expected to have increased.
