US benchmark October West Texas Intermediate (WTI) crude oil showcased mixed signals on Thursday. While prices settled lower on the daily chart, the market is still in a position to close higher for the week. Driving this sentiment are both domestic monetary policies and international market dynamics.
Fed's Rate Hiking Cycle
The recently released U.S. consumer prices data for July has ignited speculation surrounding the Federal Reserve's monetary stance. Market analysts are hypothesizing that the Fed might be concluding its aggressive rate-hiking phase. Such a move is expected to bolster commodities like oil.
OPEC's Positive Outlook and Production Cuts
The Organization of the Petroleum Exporting Countries (OPEC) released a report affirming their bullish outlook on the oil market. They anticipate a thriving oil market for the rest of the year, and their projections extend into 2024 with expectations of a surge in oil demand.
This optimistic view is further fueled by Saudi Arabia and Russia's recent decision to extend their output cuts. Additionally, there's an undercurrent of geopolitical tension – especially potential conflicts involving Russia and Ukraine in the Black Sea region – which poses threats to Russian oil shipments and inadvertently bolsters oil prices.
Despite the recent addition of a whopping 5.85 million barrels to U.S. crude stocks, the market response was unexpectedly…