WTI crude oil futures have witnessed a period of choppy and rangebound trading over the last 10 weeks, influenced by a variety of supply and demand factors. This week was no different. September West Texas Intermediate crude oil futures settled higher on Thursday after flip-flopping during the session. The move was enough, however, to turn the market higher for the week, heading into the last day of the month and quarter. The two-sided trade was fueled by a bigger draw than expected in U.S. crude inventories but pressured by fears that rising interest rates could dent global economic growth.
The recent market fluctuations can be attributed to several factors affecting the supply side of the crude oil market. One significant factor is the drawdown in U.S. crude inventories. The U.S. Energy Information Administration reported a significant reduction, surpassing expectations, which signaled tightening supplies and supported oil prices. Additionally, Saudi Arabia, as a leading member of OPEC+, announced a substantial cut in its oil output. This decision aimed to address concerns of oversupply and stabilize oil prices. However, a decline in industrial profits in China has raised concerns about fuel demand growth and its impact on oil prices.
Several demand-side factors have contributed to the choppy trading in WTI crude oil futures. One such factor is the fear of rising interest rates and its potential impact on global economic…