WTI loses traction above $82.40 amid the fear of oil supply disruptions, high rates

• WTI prices loses momentum amid Middle East geopolitical tensions.
• World Bank predicted global oil prices to average $90 per barrel this quarter.
• Concerns about more rate hikes from the Federal Reserve (Fed) might weigh on WTI prices.
• Oil traders will closely watch the Fed rate decision on Wednesday.

Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around $82.40 so far on Tuesday. A decline in WTI prices is supported by the escalating tension in the Middle East, which triggered the fear of potential oil supply disruptions.

According to a recent World Bank study, the rising tensions might exacerbate the already-existing energy market disruptions caused by Russia's war in Ukraine. Additionally, the World Bank forecasts global oil prices to average $90 per barrel this quarter. A “large disruption” scenario would lead to the oil price from about $90 to between $140 and 157.

Apart from this, concerns about rising interest rates might weigh on WTI prices. The Federal Reserve (Fed) Interest rate decisions are anticipated to maintain the rate steady, but Fed Chair Jerome Powell said that whether they will hold a rate for December will depend on the incoming data, while mentioning that an additional rate hike is possible if high economic growth and a labor shortage continue. It's worth noting that higher interest rates raise borrowing costs, which can slow the economy and diminish oil demand.

Looking ahead, oil traders will monitor the API and EIA weekly Crude Oil stock report for the week ending on October 27 due on Wednesday. On Wednesday, the Fed monetary policy meeting will be in the spotlight. Also, the US ISM Manufacturing PMI for October and Nonfarm Payrolls this week could offer hints about US economic conditions. These events could significantly impact the USD-denominated WTI price. Oil traders will take cues from the data and find trading opportunities around WTI prices.