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WTI moves in tight range, hovers around $77.80

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The benchmark West Texas Intermediate (WTI) crude oil price hovered around $77.80 per barrel in Asian trading on Tuesday.

Oil markets remain subdued, awaiting the release of the Consumer Price Index (CPI) data from the United States. Expectations are for a modest uptick in February’s US inflation figures, although the annual index is forecasted to hold steady.

A strong CPI report would probably diminish the likelihood of an immediate rate cut by the Federal Reserve, which could in turn bolster the US Dollar and pose challenges for crude oil prices.

According to the CME FedWatch Tool, there has been a slight decrease in the probability of a rate cut in June, now standing at 68.9%.

Market participants are also eagerly anticipating the release this week of monthly market reports from OPEC, the International Energy Agency (IEA), and the Energy Information Administration (EIA), aiming to assess the global demand outlook.

ANZ analysts noted in a report that, “crude oil remains within a narrow trading range as traders await demand projections from the monthly reports issued by three major oil agencies.”

While they anticipate these projections to remain largely unchanged, any unexpected upward revisions would alleviate demand concerns.

According to the EIA, US crude oil production has continued to lead global oil production for the sixth consecutive year, reaching a record-breaking average production of 12.9 million barrels per day (bpd).

US crude oil production surged to a new monthly record high of over 13.3 million bpd in December.

(Source: OANDA)