WTI crude oil rises amid production adjustment, soft USD

• WTI crude rises 0.87% to $73.51, lifted by a weaker US Dollar and lower US oil production forecasts.
• Fed's cautious interest rate outlook, with Mester highlighting a data-driven approach, affects market sentiment.
• US Energy Department cuts 2024 oil production growth estimates, influencing prices.

The US crude oil benchmark, also known as West Texas Intermediate or WTI, rises some 0.87% on the day as the Greenback weakens, despite Fed officials pushing back against rate cut expectations. That, along with a report by the US Energy Department lowering oil production, were the drivers behind the rise in oil prices. At the time of writing, WTI trades at $73.51 after hitting a low of $72.41.

Oil gains on US Energy Department reducing production forecasts, Fed officials adopt data-dependent stance

Federal Reserve (Fed) officials continued to cross the wires, with most of them seen as ready to cut rates but adopting a data-dependent stance. The last official crossing the wires was Loretta Mester, who said she sees no rush on cutting rates and that its complex offers a timing on when it would begin the easing cycle. Mester said that she expects rate cuts later in the year.

Aside from this, the US Department of Energy revealed that crude oil production will rise 170K barrels per day in 2024, down from forecasts of 290K.

In the meantime, the de-escalation of the Israel-Hamas conflict would be a relief for oil traders and can drive prices lower.

On Tuesday, the US Secretary of State Anthony Blinken said that Hames had replied to an Israel proposal for the cease-fire, saying it would be examined in the coming hours.

US oil inventory data will be released later on Tuesday, expected to show an increase in inventories for gasoline and diesel. A Reuters poll shows crude inventories climbing about 2.1 million barrels in the week to February 2.

WTI Technical Levels