WTI trades within 1-week range, above $64

West Texas Intermediate remains confined in a familiar range held over the past week or so and trades just above mid-$64.00s, down less than 0.50% for the day heading into the European session on Wednesday.

Moreover, a mixed fundamental backdrop warrants some caution before positioning for a firm near-term direction.

The ceasefire between Iran and Israel eased concerns of supply disruptions in the Middle East. Adding to this, planned supply increases by the Organisation of the Petroleum Exporting Countries and its allies, known as OPEC+, turn out to be a key factor acting as a headwind for crude oil prices.

Apart from this, a modest US dollar recovery from its lowest level since February 2022 seems to undermine the commodity.

However, the growing acceptance that the Federal Reserve would resume its rate-cutting cycle in the near future should keep a lid on any meaningful appreciation for the buck. This, in turn, should support USD-denominated commodities and limit losses for crude oil prices.

Traders might also opt to wait for the release of the closely-watched US Nonfarm Payrolls (NFP) jobs report on Thursday before placing fresh directional bets.

During the OPEC+ meeting on July 6, the cartel is expected to hike August output by 411,000 bpd.

In the meantime, Wednesday’s release of the US ADP report will play a key role in influencing the USD price dynamics. Moreover, the official US oil stockpile data from the Energy Information Administration (EIA) would provide some impetus to the black liquid later during the North American session.

(Source: OANDA)