WTI rebounds from week low, steady around $66

West Texas Intermediate (WTI) extended the previous day’s sharp retracement slide from $76.75, or a five-month peak, and attracted follow-through selling for the second straight day on Tuesday.

The US benchmark crude oil, however, trimmed a part of its heavy Asian session losses to a nearly two-week low and currently trades just above $66.00, down 1.30% for the day.

Investors sighed in relief after Iran’s restrained strike on a US military base in Qatar, instead of oil tankers in the Strait of Hormuz. Adding to this, President Donald Trump announced a complete ceasefire between Israel and Iran.

This helps ease market worries about supply disruptions from the Middle East and turns out to be a key factor weighing heavily on crude prices.

Meanwhile, traders ramped up their bets for a potential interest rate cut by the Federal Reserve in July, following the release of mixed US PMIs and dovish-sounding remarks from influential FOMC members on Monday. This, along with receding safe-haven demand, drags the US dollar to over a one-week low and benefits the USD-denominated commodities, assisting oil prices to rebound from the $64.15 area.

Traders now look forward to the US economic docket, featuring the release of the Conference Board’s Consumer Confidence Index and the Richmond Manufacturing Index.

Apart from this, speeches from influential FOMC members, including Fed Chair Jerome Powell’s congressional testimony, will drive the dollar. This, along with geopolitical developments, should provide a fresh impetus to oil prices later during the North American session.

(Source: OANDA)