WTI crude oil attracts buyers near the 73.30 area

• WTI crude oil attracts some buyers near the $73.30 area in the early Asian session.
• Saudi Arabia and Russia's oil supply cut could suggest a constructive view for WTI oil prices.
• Higher global interest rates could lead to a slowdown in economic growth and a decrease in oil demand.

Western Texas Intermediate (WTI), the US crude oil benchmark, attracts some buyers near the $73.30 area during the Asian trading hours on Monday. WTI crude oil exchanges hands at $73.65, up to 0.04% on the day. Further tightening monetary policy from the Federal Reserve (Fed) and the renewed trade war between the US-China might cap the upside of black gold despite the fresh output cuts by Saudi Arabia and Russia. 

The Energy Information Administration (EIA) reported on Thursday that US inventories fell by 1.5 million barrels, more than expected in the week to June 30, indicating improved oil demand amid the high season during the summer.

Meanwhile, “the Organization of Petroleum Exporting Countries (OPEC) will likely maintain an optimistic view on oil demand growth for next year when it publishes its first outlook later this month, predicting a slowdown from this year but still an above-average increase” said Reuters.

Additionally, Saudi Arabia and Russia, the world's biggest oil exporters announced fresh output cuts this week, bringing total reductions by OPEC+, OPEC and its allies, to around 5 million barrels per day (bpd), or about 5% of global oil demand, said Reuters. This progress could suggest a constructive view for WTI oil prices.

Nevertheless, concerns that higher interest rates globally may lead to a slowdown in economic growth and a decrease in oil demand could limit the upside in oil prices. According to the CME Group’s FedWatch Tool, market players remain certain the US Federal Reserve (Fed) will increase rates by 25 basis points (bps) at the July 25-26 policy meeting. The odds for the same are 92.4%, higher than last week’s 86.8%. 
Also, new restrictions on the export of minerals used in semiconductors and solar panels were announced by the Chinese government, which could pose a headwind for WTI crude oil. 

Additionally, the Consumer Price Index (CPI) and the Producer Price Index (PPI) both softened in June, fueling the concern about the economic slowdown in China, the world’s second-largest economy.

Later in a week, Crude Oil Inventories, the Baker Hughes oil rigs count and CFTC positioning data will be featured. Also, the US Consumer Price Index (CPI), the Producer Price Index (PPI) and the US University of Michigan Preliminary Consumer Sentiment (July) will be released and could have a significant impact on the USD-denominated WTI price.