• For the third day in a row, WTI declines as expectations for a Gaza truce rise.
• Anticipations of a reduction in worldwide supply ought to aid in preventing additional losses.
• Aggressive, pessimistic traders should exercise caution due to the underlying background.

For the third day in a row, West Texas Intermediate (WTI) US crude oil prices are still under some selling pressure. During the Asian session, they are trading close to the weekly low, in the $80.30 range.

Concerns over Middle East supply interruptions have decreased, according to US Secretary of State Antony Blinken, as negotiations to secure a truce in Gaza and the release of prisoners are getting closer. The positive US economic forecast and some subsequent buying of US dollars (USD) are the main causes driving down the price of commodities denominated in USD, such as crude oil. However, concerns over a tighter global supply seem to have softened the downside.

Drone attacks by Ukraine on Russian oil refineries may cause Russia to reduce its fuel output. This follows the International Energy Agency’s upward adjustment of the growth in oil demand projected for 2024 and the decision by OPEC+ members to prolong the 2.2 million barrels per day output cuts through the second quarter. A more robust US economy and a possible Chinese rebound also raise the prospect of tighter supply. This should cause the price of crude oil to rise; therefore, pessimistic traders should exercise care.