- WTI lacked a clear indicator on Tuesday as fundamental data was mixed.
- Worries about slowing demand continue to weigh on oil prices.
- Tensions in the Middle East call for caution before preparing for further losses.
U.S. West Texas Intermediate (WTI) crude oil prices struggled to capitalize on modest gains from the previous day in the Asian session on Tuesday, trading in a tight range around $69.70-$69.75. Meanwhile, the stock remains far from its nearly three-week low hit last Friday and looks set to extend its losses from the past two weeks.
The initial market reaction to the People’s Bank of China’s (PBOC) rate cut on Monday was short-lived amid concerns about slowing demand, which continues to weigh on gasoline prices. The Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) cut their global demand forecasts last month due to an economic slowdown in China, the world’s largest oil supplier. IEA Director Fatih Birol added to the concerns overnight by warning that China’s economic weakness would continue to weigh on global oil demand in the coming years.
The US Dollar (USD) also recently rose to its highest level since early August on expectations of a weakening of the Federal Reserve’s (Fed) easing policy, which has narrowed the room for crude oil prices to rise. Still, the risk of escalating conflict in the Middle East, which could impact supply from major oil-producing regions, has provided some support for the dark liquid. That should prompt bearish traders to exercise some caution and prepare for a continuation of the recent sharp pullback from the $78.00 level, near a two-month high on October 8.
