WTI surges amid output adjustment, softer dollar

The US crude oil benchmark, WTI, rose 0.87% to $73.51, driven by a weaker US Dollar and lower oil output forecasts. The Fed’s cautious interest rate outlook, with Loretta Mester highlighting a data-driven approach, has influenced market sentiment.

The US Energy Department’s report lowering oil output and the Fed’s cautious stance on rate cuts have contributed to the rise in oil prices. WTI trades at $73.51 after hitting a low of $72.41.

Fed officials, including Loretta Mester, are seen as ready to cut rates but adopt a data-dependent stance. The US Department of Energy revealed that crude oil output will rise 170K barrels per day in 2024, down from forecasts of 290K.

The de-escalation of the Israel-Hamas conflict could provide relief for oil traders and drive prices lower.

US Secretary of State Anthony Blinken announced that Hames had replied to an Israel proposal for a cease-fire, which will be examined in the coming hours.

US oil inventory data is expected to show an increase in gasoline and diesel inventories.