WTI retraces recent gains near $89.70 on Fed officials' hawkish remarks, US data eyed

• Crude prices ease from the recent gains ahead of US data releases.
• The hawkish remarks made by Fed officials could dampen the demand for the black gold.
• Russia implemented a temporary ban on gasoline and diesel fuel exports in an effort to stabilize its domestic market.

Western Texas Intermediate (WTI), the US crude oil benchmark eases from the recent gains, trading lower around $89.70 per barrel during the Asian session on Monday.

Investors are anticipated to provide upward support to Crude oil prices due to their focus on a tighter supply outlook. This is exacerbated by Moscow's temporary ban on fuel exports. However, there is also caution regarding the potential impact of further rate hikes on demand.

The prices of black gold had risen more than 10% in the last three weeks due to a constrained production outlook from Saudi Arabia and Russia.

The combined supply cuts of 1.3 million barrels per day from Saudi Arabia and Russia have been extended until the end of 2023. Market analysts believe that this extension will exacerbate an anticipated 2 million barrels per day deficit in global oil supplies.

However, the US Federal Reserve’s (Fed) hawkish stance on the interest rates trajectory snapped a winning streak in oil prices during the previous week.

Furthermore, Moscow imposed a temporary ban on gasoline and diesel exports last week with the aim of stabilizing the domestic market. This move has raised concerns about a potential shortage of petroleum products as the northern hemisphere enters the winter season.

US Dollar Index (DXY), measuring the Greenback's value against six major currencies, is struggling to gain momentum, hovering around 105.60 at the time of writing. However, the yield on the 10-year US Treasury note appreciated to 4.45%, a 0.50% increase by the press time, which could provide support in underpinning the US Dollar (USD).

Moreover, Boston Fed President Susan Collins has stated that further tightening is possible but emphasized the need for patience. While US Federal Reserve (Fed) Governor Michelle W. Bowman expressed a similar opinion, adding that more rate hikes are necessary to curb inflation. Rising interest rates could dampen the demand for the Crude oil.

The Federal Reserve has stressed the significance of keeping interest rates elevated for an extended duration to steer inflation back to its 2% target. This stance has heightened market anticipations for at least one additional 25-basis-point rate hike by year-end. Moreover, the Fed's "dot plot" now suggests only two rate hikes in 2024, a reduction from the prior forecast of four rate hikes.

Investors will likely watch the US economic calendar, which includes key data releases such as Consumer Confidence, Durable Goods Orders, Initial Jobless Claims, and the Core PCE, the Fed's preferred measure of inflation.

The annual figure for Core PCE is expected to drop from 4.2% to 3.9%. These figures could provide cues on the economic situation in the US, which helps the traders of the WTI Crude oil in placing their fresh bets.